Report: Probe looks at CEO's role in insurance dealBy The Associated Press
March 5, 2005
NEW YORK -- Federal and state investigators are looking into a deal between American International Group Inc. and Berkshire Hathaway Inc.'s General Reinsurance unit in part because of the alleged involvement of AIG's chairman and chief executive, The Wall Street Journal said on Friday.
The paper, quoting unnamed "people familiar with the matter," said the deal involved nontraditional insurance, which authorities allege may have been used to manipulate financial reports.
The Journal said that AIG Chairman and CEO Maurice Greenberg "has personally received at least one subpoena" over his role in the previously disclosed transaction.
The investigation was launched by New York Attorney General Eliot Spitzer and the Securities and Exchange Commission and has since been joined by federal attorneys, the Journal said, quoting anonymous sources.
It is unclear which authority sent the subpoena to Mr. Greenberg, the paper said.
Spitzer and the SEC have been conducting a broad investigation into nontraditional products, also known as "finite risk" insurance and reinsurance. At issue is whether they meet the definition of insurance, which involves a transfer of risk, or whether they are simply devices to manipulate accounting statements.
The company said in a statement that "today's Wall Street Journal article involves an investigation that AIG previously disclosed in a press release 3 weeks ago. ... AIG said that it will cooperate with the investigation."
AIG is headquartered in New York; Berkshire Hathaway is based in Omaha, Neb. and is run by chairman and CEO Warren Buffett.
AIG shares rose 14 cents to close at $65.10 in Friday trading on the New York Stock Exchange. Berkshire Hathaway shares dropped $302 to close at $89,300 on the Big Board.