Former comptroller Michael Castelli is one of as many as eight employees — most of them finance executives — who may get the boot from American International Group Inc. during the next few weeks, according to The Wall Street Journal,citing a person familiar with the matter.
Castelli, who served as comptroller from 2000 through early January, has been on leave since mid-April from his current position as chief administrative officer, noted the paper. An AIG spokesman would not comment, the Journal added, but according to its source neither chief executive officer Martin J. Sullivan nor chief financial officer Steven J. Bensinger are on this “departure” list.
No AIG executive has been charged with wrongdoing.
AIG has promised to release its annual report on May 31, following three delays that have also seen the company’s earnings restatement balloon to $2.7 billion. The Journal theorized that AIG may time the dismissals to take place before the filing, so the company can get all of its bad news out of the way in one go.
Easier said than done. AIG is under investigation by the Department of Justice, the Securities and Exchange Commission, and the New York State Insurance Department, according to The New York Times, which also reported that a high-ranking AIG executive has struck a deal with New York State Attorney General Eliot Spitzer. Joseph H. Umanksy, an AIG senior vice president as well as the president of AIG Reinsurance Advisers, will cooperate with Spitzer’s office in exchange for immunity from prosecution, the Times added.
In a related story, AIG announced in an SEC filing that if its outside directors become plaintiffs in an AIG-related lawsuit, then the company will pay their legal fees and expenses, reported the Associated Press. The directors include M. Bernard Aidinoff, Pei-yuan Chia, Marshall A. Cohen, William S. Cohen, Martin S. Feldstein, Ellen V. Futter, Stephen L. Hammerman, Carla A. Hills, Frank J. Hoenemeyer, Richard C. Holbrooke, George L. Miles, Jr., Morris W. Offit, and Frank G. Zarb.
Indeed, the San Francisco Employees’ Retirement System announced that it filed a lawsuit against the insurer for violating federal securities laws and causing the fund to lose $4 million, according to Reuters. The suit also alleged that General Re Corp., a unit of Berkshire Hathaway Inc., helped AIG create what the California city called a “sham” insurance deal, according to the wire service, citing a statement by City Attorney Dennis Herrera.
