The Securities and Exchange Commission has warned Maurice Greenberg, the former chief executive of American International Group Inc. of New York, that he may face civil charges for his alleged role in the company’s attempt to inflate artificially its financial information, The Wall Street Journal reported.
A Wells notice was sent to Mr. Greenberg last Friday, the Journal said.
Although the notice means that the regulator plans to recommend enforcement proceedings, respondents have the opportunity to contact the SEC and make their case.
The missive is the latest chapter in the fallout from a transaction between AIG and Stamford, Conn-based General Re Corp., a reinsurance unit of Berkshire Hathaway based inOmaha, Neb.
Four former Gen Re executives and an ex-AIG executive have been accused of conspiring to inflate falsely AIG’s loss reserves by $500 million through a series of transactions between the two companies.
Mr. Greenberg, who was ousted from AIG in 2005, had been identified as an unindicted alleged co-conspirator in the case.
The SEC’s letter came a day after a U.S. District Court judge in Connecticut asserted that there was “sufficient evidence” to show that the conspiracy to exaggerate AIG’s loss reserves and fool the company’s investors all started with a call that Mr. Greenberg made to General Re’s ex-CEO Ronald Ferguson, one of the five convicted executives, according to court documents.
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