Risk & Compliance

Greenberg Willing to Settle, Says Lawyer

''If a reasonable resolution could be reached without litigation, that's obviously in everybody's interest,'' says an attorney for the former AIG c...
Stephen TaubJuly 5, 2005

After 80 years, Maurice Greenberg is showing some humility.

The former chief executive officer of American International Group Inc. has indicated a willingness to work out a deal with New York Attorney General Eliot Spitzer to settle a fraud lawsuit, according to Bloomberg, citing Greenberg lawyer David Boies.

“If a reasonable resolution could be reached without litigation, that’s obviously in everybody’s interest,” Boies told the wire service. “I think there will be some serious settlement discussions.”

This is quite a turnaround for Greenberg, who throughout his career has fostered the image of a tough, steely executive — witness his earlier vows to fight Spitzer’s charges that he participated in any sort of fraud at the insurance giant.

As we reported in May, Spitzer and New York State Insurance Superintendent Howard Mills filed a civil lawsuit against AIG, Greenberg, and former chief financial officer Howard I. Smith accusing them of manipulating the company’s financials in order to deceive regulators and investors. The lawsuit also charged that Greenberg and Smith engaged in numerous fraudulent business transactions to exaggerate the strength of the company’s core underwriting business and prop up its stock price.

Boies, who told Bloomberg that Greenberg still disputes the allegations, noted that many settlements are reached without the defendants admitting wrongdoing. And although Boies doubted that Spitzer would criminally indict Greenberg, “you never want to predict what regulators or prosecutors will do,” he reportedly added.

Spitzer spokesman Darren Dopp wasn’t available to comment to the wire service.

Boies also told Bloomberg it’s even possible that a comprehensive settlement could also resolve probes by the Securities and Exchange Commission and the Department of Justice.