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Mar 3, 2009 1:56 am

Monday, March 02, 2009

Former Chairman Sues AIG for Securities Fraud

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Joanna Ossinger



Troubled insurer American International Group (AIG: 0.4502, 0.0203, 4.72%), which reported a $61.7 billion fourth-quarter loss and received another restructuring of its bailout on Monday morning, was sued by its former chairman Maurice Greenberg for securities fraud.

In the complaint, Greenberg alleged that “material misrepresentations and omissions caused Mr. Greenberg to acquire, at an artificially inflated price, stock in AIG” as awarded in his deferred compensation plan from Starr International, a company affiliated with AIG.

Greenberg is seeking to recover the alleged difference between the price he paid for the shares and the price of the “true and fair value” of the shares, as well as the “excessive income tax” he claims to have paid.

The complaint was filed with the U.S. District Court for the Southern District of New York on Thursday, but copies were made available only on Monday.

Greenberg named as defendants not only AIG itself, but also Martin Sullivan, Greenberg’s successor as CEO; Joseph Cassano, the former head of the financial-products division; Steven Bensinger, a former chief financial officer and executive vice president; Stephen Bollenbach, a current board member; George Miles, a current board member; Morris Offit, a current board member; and Michael Sutton, a current board member.

Mar 4, 2009 1:10 am

Big brass ones.

Mar 4, 2009 4:15 am

I hear he is trying to get back to AIG to run it... At this point why not give him the chance... Liddy(libby) is useless(i think allstate is a puppy, compared to the beast that is AIG)