Former American International Group, Inc. chief Maurice ‘Hank’ Greenberg agreed to pay $15 million to settle charges that he violated antifraud and other provisions of securities laws.
Greenberg, the former chairman and chief executive of the company, agreed to a judgment enjoining him from violating antifraud provisions of the Exchange Act and from controlling any person who violates federal accounting rules.
Also reaching a settlement was the former chief financial officer and Vice Chairman of AIG Howard Smith. Both men did not admit or deny guilt for the charges.
In 2006, AIG settled charges of securities fraud an improper accounting by paying $800 million, among other remedies.
The SEC today today filed a suit in U.S. District Court for the Southern District of New York.
The SEC alleged both men made misstatements to create a false impression that the company was consistently meeting key earnings and growth targets. The regulator alleged improper accounting disguised financial challenges facing the company.
Charges included concealing multi-million underwriting losses from the company’s auto-warranty insurance business, improper transactions to report income gains, an alleged sale of tax exempt municipal bonds to a subsidiary to improperly recognize realized capital gains.
The SEC alleged that Greenberg knew what would be the effects of some of the improper transactions on the company’s finances, and that along with Smith, made false and misleading public statements, and left out information from quarterly reports in the second and third quarters of 2002.