AIG Denies Wrongdoing In Share Probe

By Arthur D. Postal, Washington Bureau Chief

NU Online News Service, Dec. 14, 4:26 p.m. EST,Washington?American International Group is denying anywrongdoing in connection with a federal probe into whether it actedto improperly control its stock price before it acquired AmericanGeneral Corp. for shares in 2001.[@@]

AIG's denials were in connection with a Wall Street Journalarticle which said Credit Suisse First Boston had been issued asubpoena by the U.S. Attorney's office for the Southern District ofNew York regarding its trading activities in August 2001.

Victoria Harman, a spokesman for CSFB, would not confirm or denythe firm had been issued a subpoena in connection with the probe.She added that, "CSFB simply handled a customer's trade in AIGshares. We are cooperating fully with the authorities in thismatter."

The investigation of AIG deals with its behavior during theperiod when it was about to acquire Houston-based American Generalin a deal for $23 billion in AIG stock. Completion of theacquisition would have been more costly for AIG if its stock pricefell below a certain threshold in a 10-day period ending three daysbefore the deal closed.

The Wall Street Journal article said that CSFB is not a targetof the probe, but has received a subpoena for information about itsAIG trading activities during the period in question.

But, AIG categorically denied wrongdoing. Joe Norton, aspokesman, said AIG "was not buying stock during the pricing periodnor did anyone to our knowledge buy AIG stock on AIG's behalf.These anonymous allegations are unfounded and irresponsible."

The Journal has previously reported that investigators wereprobing whether AIG Chairman Maurice Greenberg brought pressure onthe specialist firm that oversees AIG stock trading.