Former AIG CEO Hank Greenberg will have to pay $15 million in penalties for 2000-2005 infractions at the insurance giant
It's another black eye for ailing insurance giant American International Group (AIG). On Aug. 6, the Securities & Exchange Commission charged that former Chief Executive Maurice "Hank" Greenberg and former Chief Financial Officer Howard Smith were involved in numerous improper accounting moves between 2000 and 2005. The two men settled without admitting or denying guilt. Greenberg will pay a penalty of $15 million; Smith, $1.5 million.
The SEC's complaint paints a picture of two executives creatively focused on managing Wall Street analysts' expectations and the value of AIG's share price. Each maneuver was made to create the impression that the company was consistently meeting or exceeding key earnings and growth targets. Similar charges were filed earlier in the week by the SEC against General Electric (GE), though in that case the alleged infractions were quite different.
"Corporate leaders cannot avoid the truth and consequences of their companies' performance by using improper accounting gimmicks and signing off on distorted financial reports," said Robert Khuzami, director of the SEC's Enforcement Div., in a statement.
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