Risk & Compliance

Greenberg Shifts $2.2B of Shares to Wife

The transfer, made four days before Greenberg's ouster as CEO, represented 96 percent of his direct-ownership stake in AIG.
Stephen TaubApril 13, 2005

Former American International Group Inc. chairman and chief executive officer Maurice “Hank” Greenberg transferred ownership of 41.4 million shares of the insurance company to his wife, Corinne P. Greenberg, according to a regulatory filing.

The transfer, made four days before Greenberg’s ouster as CEO, represented 96 percent of his direct-ownership stake in AIG, reported Bloomberg. Those shares are worth $2.2. billion at Tuesday’s closing share price, according to Dow Jones.

The maneuver may well be an effort to shield those assets from the clutches of prosecutors and civil litigants. According to Bloomberg, Howard Opinsky, a spokesman for Greenberg’s attorneys, declined to comment on the transfer.

As for whether such a maneuver could be successful, “If it’s transparently a gift to his wife, it presumably wouldn’t work,” Robert Weisberg, a professor at Stanford Law School, told the wire service. “The courts are going to say phony baloney — we’ll simply take the stock from the wife same as we’d take it from the husband.”

“All the alarms are going off, and red flags are waving, when he makes such a huge transfer at the exact same time that he’s under civil lawsuit scrutiny and criminal scrutiny,” Thomas Ajamie, a securities lawyer in Houston, told the Associated Press. “This large of a transfer, even in isolation, would garner regulatory scrutiny, but in the context of the criminal and civil issues, the warning bells are waking up people from here to China.”

Indeed, yesterday Greenberg invoked the Fifth Amendment during an hour-long deposition with examiners from the offices of New York Attorney General Eliot Spitzer and the SEC, according to the wire service, citing Paul Jensen, a spokesman for Greenberg attorney David Boies.