From Bloomberg News;
By David Glovin
March 2 (Bloomberg) -- American International Group Inc., which reported the biggest loss by a publicly traded U.S. firm, was sued for securities fraud by former Chief Executive Officer Maurice “Hank” Greenberg. Greenberg filed his suit today in Manhattan federal court, saying the company’s “material misrepresentations and omissions” caused him to acquire AIG shares in his deferred compensation profit participation plan at an inflated valued.
The suit comes on the same day that AIG CEO Edward Liddysaid that Greenberg was partially to blame for the firm’s woes. Greenberg, 83, led AIG for almost 40 years before being forced to retire in 2005. The case is Greenberg v. AIG, 09-cv-1885, U.S. District Court, Southern District of New York (Manhattan).
You really can't make this stuff up! I bet if you took Fydor Dostoevsky, Mark Twain, John Irving and Steven King, put them in a room and told them to come with a crazy saga like Greenberg and AIG...no way they could do it! Greenberg got booted from AIG in 2005 because earlier in the decade AIG was caught red-handed artificially inflating it's reserves, in part by using derivatives and phony-baloney credit wraps with Gen-Re. Along the way, Greenberg certainly helped build AIG Financial Products, the part of the company that wrote insurance on anything from residential mortgage defaults to Martian invasions.
After Greenberg got the boot, he still owned plenty of stock and I am sure was VERY happy with all the money AIG was making in 2005-2007. He had to know that the Financial Products Group was the big "money maker". Didn't he wonder how they could be" making" so much money? I'm sure he got told, "Hank, it's like taking candy from babies. We take our AAA rating, slap it on a bond that's AAA AND has an insurance wrap from a AAA rated mononline......and these dopes are paying us to write protection on the bonds!" And Hank probably said something like, "Go with God my son and make me more money."
Then the shyt hits the fan in late 2007 and Greenberg starts criticizing CEO Marty Sullivan. By 2008 when AIG is going toes up.....for the FIRST time....Hank is telling anyone that would listen that AIG is a "National Treasure" and breaking it up was like spray painting the Sistine Chapel! Meanwhile, none of this was Hank's fault. It was all that Marty Sullivan's fault. None of this stuff happened on his watch. Riiiiiiiiiiiiiiiiiight. Here is an example of where I will actually give credit for a CEO being way too smart and way too controlling...even after he got the boot. Hank Greenberg had a damn good idea what was going on at AIG, just like Dick Nixon knew what was going on in his White House.
And now the final act. We are at the point where probably even Hank can't believe AIG is down another $60 billion and suddenly "Our National Treasure" is actually a big pile of securities fraud! Good luck with that Hank!