SEC moves to secure AIG documents
By Alistair Barr
April 7, 2005
SAN FRANCISCO (MarketWatch) -- The Securities and Exchange Commission said Thursday that it obtained a court order to prevent Maurice "Hank" Greenberg and others from destroying or hiding documents connected with its investigation of insurance giant American International Group.
It also defines procedures for collecting and copying evidence from overseas and bringing it back to the SEC and New York Attorney General Eliot Spitzer.
Greenberg's law firm, Boies, Schiller & Flexner, didn't return calls seeking comment Thursday afternoon. David Boies, the firm's chairman and founder, signed the agreement as the attorney for Greenberg and Starr.
Spitzer, the SEC and the U.S. Justice Department are investigating whether AIG used complex reinsurance transactions to manipulate its financial statements. They're also probing links between AIG and offshore private companies that own AIG shares, including C.V. Starr and Starr International.
The probes forced Greenberg to step down as chairman and chief executive of AIG, and last week forced the company to admit to a series of accounting improprieties that may knock out more than $1.7 billion of its net worth.
"We sought this order in response to reports of the movement of documents subject to this investigation," said Mark Schonfeld, director of the SEC's northeast regional office. "This order will ensure the security and integrity of documents is preserved and that relevant evidence will be available in our ongoing investigation."
Late last month, a lawyer for Greenberg took boxes of documents out of an AIG office in Bermuda and drove off with them in a van, The Wall Street Journal reported.
Lawyers representing AIG arrived the next day to find some company records were missing. They also learned an AIG employee had destroyed some computer records and tapes of business meetings, the newspaper said.
There's now a dispute between Greenberg, C.V. Starr and AIG over who should control certain documents, according to the SEC.
The agency's court order prohibits Greenberg, Starr and AIG from removing the documents and sets out rules governing how they should be handled, the SEC indicated.
As part of the court order, lawyers for Greenberg, Starr and AIG signed an agreement with the SEC and Spitzer allowing the documents to be secured, copied and brought back to the United States.
The SEC lacks jurisdiction over Starr International, one of the private offshore companies under investigation, according to Boies, Schiller & Flexner.
In a letter to the SEC, Spitzer's office and lawyers for AIG, Boies, Schiller attorney Lee Wolosky said the agreements struck Thursday won't "waive or affect any argument that Starr International may have concerning whether or not documents referred to herein are subject to subpoena."
That leaves the lawyers the option of refusing to hand over Starr International documents, said Joel Androphy, a partner at Houston-based law firm Berg & Androphy.
"It's a standard legal maneuver," added Androphy, who specializes in white-collar crime defense. "They're saying, 'We'll hand over documents you ask for up to a point, but reserve the right to refuse if we have to.'"