A number of powerful players took a huge fall from grace this past year, while one iconic figure staged a major comeback in the midst of the financial meltdown that almost destroyed the biggest insurance titan of all--American International Group.

In late February, five former top executives with General Reinsurance and AIG were found guilty of 16 federal charges in a scheme to use a bogus finite reinsurance deal to help AIG falsely boost its financial standing. The biggest fish caught was Ronald Ferguson, Gen Re's former CEO.

The other four defendants were Christopher Garand, a former Gen Re senior vice president; Robert Graham, Gen Re's former senior vice president and counsel; Elizabeth Monrad, Gen Re's former chief financial officer; and Christian Milton, former AIG vice president for reinsurance.

Two other executives copped a plea for lesser charges and testified for the prosecution--John Houldsworth (formerly CEO of Cologne Re, an arm of Gen Re involved in the deal) and Richard Napier (a former Gen Re senior vice president).

The crux was that Gen Re had helped AIG pump finite re steroids to mislead analysts and the public, artificially enhancing AIG's balance sheet to trick investors into believing the company was in better shape than was actually the case.

The involvement of Mr. Ferguson was the real shocker, coming after a stellar 30-year career. The affair gave another black eye to an industry with a reputation already undermined by bid-rigging scandals.

Also named an unindicted co-conspirator was Maurice Greenberg, AIG's former chairman and CEO, who left the firm in 2005 after the finite re allegations became public. Mr. Greenberg, who now heads C.V. Starr & Company, may not be off the hook, as he received a Wells Notice from the SEC, which is still looking into the case.

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