Buffett set to meet with AIG investigators Monday - Apr. 8, 2005
April 8, 2005
NEW YORK (CNN/Money) - Warren Buffett is to meet Monday with state and federal investigators looking into his company's business ties to embattled insurer American International Group and possibly other firms, a filing said Friday.
Meanwhile, a tip from Buffett may have led to the fall of AIG's long-time chairman and CEO, according to a published report.
Buffett, chairman and CEO of Berkshire Hathaway will meet jointly with investigators from the Securities and Exchange Commission, the office of the New York Attorney General, the Department of Justice and the U.S. attorney's office, according to an SEC filing by the company.
The filing said the group of investigators has already talked to a number of current and former officers and employees of General Re and General Reinsurance, the Berkshire reinsurance firms that had the business dealings with AIG. Reinsurance firms sell insurance to insurers seeking to spread their risks.
The filing also suggests, although it does not specify, that investigators may be looking at Berkshire deals with companies other than AIG.
"General Re and Berkshire have been responding to requests from all of the governmental authorities involved in these investigations for information relating to certain transactions that may have been accounted for incorrectly by counterparties of General Reinsurance (or its subsidiaries), including in at least one case American International Group," the filing said.
"Berkshire understands that the government is reviewing the role of General Re and its subsidiaries, as well as that of their counterparties, in these transactions."
The Wall Street Journal reported Friday that Buffett is the one who gave investigators the tip that led to the probe of AIG -- which, in turn, resulted in the departure of Maurice "Hank" Greenberg, the insurer's long-time chairman and CEO.
The Journal reports that in an effort to win leniency for Berkshire from prosecutors in an unrelated case, Buffett had his lawyers turn over documents describing a suspect transaction between a Berkshire unit and AIG.
The documents in question served to spruce up AIG's financial reports, and may have been doctored after the deal was struck, according to a report in the New York Times.
The revised paperwork makes it look like General Re paid $10 million to AIG for services on the transaction, although AIG initially paid General Re $5 million, according to the paper.
The Journal said it was those documents that led regulators to question whether AIG was using reinsurance deals to manipulate its earnings and which eventually led to Greenberg's departure under pressure in March.
The newspaper said Buffett won't be put under oath for his interview with investigators, who consider him at this point a witness in the probe, according to people close to the situation.
Berkshire Hathaway issued a statement last month saying Buffett had no advance knowledge that there were problems with the dealings between the company and AIG.
"Mr. Buffett was not briefed on how the transactions were to be structured or on any improper use or purpose of the transactions," the statement said.