NY jury studying possibility of criminal probe at AIG

05/20/05 - newratings.com

NEW YORK, May 20 (newratings.com) – A New York grand jury is investigating the possibility of criminal conduct at American International Group Inc (AIG). The insurance company had earlier this month reported that its net worth may have been inflated due to improper financial transactions.

According to Bloomberg, New York Attorney General Eliot Spitzer is presenting evidence to the jury, which may result in indictments. Spitzer and the US Securities and Exchange Commission subpoenaed AIG in February, which had triggered the ouster of the company’s chairman and CEO, Maurice Hank Greenberg. In a statement on May 1, AIG had said that its accounting violations included reinsurance transactions with affiliated offshore companies, which served to overstate profit and understate liabilities from claims. The correction of these accounting errors would result in a reduction in AIG’s net worth by $2.7 billion, the company had admitted.