The federal trial of four former insurance executives from Gen Re and one from American International Group accused of using a false transaction to puff up AIG financial results began yesterday in Hartford, Conn.
Prosecutors told the jury that Gen Re leant AIG $500 million to increase its loss reserve and improve its standing with investors. The loan, they contend, was disguised as a sham reinsurance transaction to hide it from both investors and the government.
The executives are charged in a 16-count federal indictment with violation of federal securities law, securities fraud, mail fraud, and making false statements to the Securities and Exchange Commission.
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