Maurice "Hank" Greenberg, the ousted chief executive of American International Group (AIG), may be willing to negotiate with New York Attorney...
Maurice “Hank” Greenberg, the ousted chief executive of American International Group (AIG), may be willing to negotiate with New York Attorney General Eliot Spitzer to settle a fraud lawsuit, one of Greenberg’s lawyers said.
“If a reasonable resolution could be reached without litigation, that’s obviously in everybody’s interest,” attorney David Boies said Friday. “I think there will be some serious settlement discussions.”
The comments mark a retreat for the 80-year-old Greenberg, who insisted in May, when Spitzer filed the civil suit, that he would contest the allegations.
In a May 26 statement, Greenberg’s lawyers said they would “vigorously defend” the case and “respond in due course, denying any fraudulent conduct.”
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The suit accuses Greenberg, who ran New York-based AIG for almost 40 years, of misleading regulators and investors by using sham reinsurance contracts and other improper accounting to understate liabilities and inflate underwriting income at the world’s largest insurer.
Greenberg still disputes the allegations, Boies said, pointing out that many settlements are reached without the defendants admitting wrongdoing.
Boies also said it’s unlikely Spitzer would criminally indict Greenberg because his suit covers “civil issues, not criminal issues.”
He then added, “You never want to predict what regulators or prosecutors will do.”
Spitzer spokesman Darren Dopp wasn’t available to comment.
Boies didn’t rule out a comprehensive settlement that also would resolve investigations by the Securities and Exchange Commission and the Department of Justice, though “even a partial settlement may be something that makes sense.”
He also said it was too early to say what constituted a “reasonable” settlement, adding he didn’t know when settlement talks might begin.
AIG, which was also named in the suit, has restated five years of earnings, lowering profit by $3.9 billion, or 10 percent. Its stock is down 20 percent since the company said it had received subpoenas Feb. 14.
AIG has said it aims to settle the Spitzer suit.