Former CEO of American International Group (AIG) Maurice “Hank” Greenberg will face civil charges in the USA over allegedly fraudulent transactions.
At the highest court in New York, the New York Court of Appeals, permission was given for the Attorney General to pursue an injunction that could see both Greenberg and the company’s former CFO Howard I Smith barred from the securities industry.
According to a report at Law360.com, claims have been made that the duo reaped in millions in bonuses from allegedly sham transactions and if found guilty they could be forced to return the money gained through the deals.
Greenberg and Smith had appealed against a ruling made in April last year that affirmed a Judge’s rejection of a bid to end the case. Back in May 2014, the duo argued that state authorities did not have the right to ban them from the industry, prevent them from holding directorial and officer positions and recoup compensation.
However, now the Court of Appeals has stated that the Attorney General does have the right to pursue all three courses.
In the lawsuit, Smith and Greenberg are accused of overseeing transactions with companies, including Gen Re, in an effort to inflate the health of the company’s finances. Greenberg resigned back in 2005 when it emerged that the government had been investigating the company over alleged fraudulent transactions, bid-rigging and accounting fraud.
In a separate case, we revealed yesterday that AIG had failed to persuade a California court to dismiss a lawsuit from Pacific Investment Management Co. (Pimco) relating to losses sustained during the 2008 financial crisis.
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