Legal Issues
On March 15, 2005, AIG's board forced Greenberg to resign from his post as Chairman and CEO under the shadow of criticism from Eliot Spitzer, attorney general of the state of New York. On May 26, 2005, as part of a series of actions against the alleged criminal activities of large corporations, Spitzer filed a complaint against Greenberg, AIG, and Howard I. Smith (ex-CFO of AIG) alleging fraudulent business practice, securities fraud, common law fraud, and other violations of insurance and securities laws.
After a subsequent investigation, however, all criminal charges were dropped, and Greenberg was not held responsible for any crimes. The State Attorney General's office however is still pursuing Greenberg in civil court for many of these same criminal allegations. Greenberg settled on a $15 million fine for the accusations of fraudulent AIG financial positions.
Spitzer did, however, bring civil charges against Greenberg, though he dropped two of the six initial charges in September 2006. Greenberg's attorney claimed vindication with the dropping of the two charges, but Spitzer's office maintained that the four remaining charges are the core of the State's original charges.
Read more about this topic: Maurice R. Greenberg
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