AIG Settles With Justice On Brightpoint
NU Online News Service, Nov. 23, 9:51 a.m. EST?American International Group said it has reached an agreement in principle with the U.S. Justice Department, which had been investigating the company's sale of non-traditional insurance products.
The company said it has also submitted an offer of settlement to the staff of the U.S. Securities and Exchange Commission that the staff has agreed to recommend to the SEC.
AIG said its settlement activities involved "issues arising from certain structured transactions with The PNC Financial Services Group, Brightpoint, Inc., and related matters." AIG noted that any final settlement is subject to approval by the SEC, the Justice Department and the U.S. District Court.
AIG, while admitting no wrongdoing, previously paid a $10 million fine related to its transactions with Brightpoint, which the SEC said involved disguising a loan as an insurance policy?a deal that helped the Indiana mobile phone distributor improve its financial picture.
The activity involving Brightpoint had been the subject of a federal grand jury probe in Indianapolis. AIG's involvement with PNC Financial Services Group involved helping the bank keep bad loans off its books.
AIG's chairman and chief executive officer, Maurice Greenberg, said during the company's last conference call with analysts that the firm's lawyers were working hard to settle the case.
Even as AIG appears near to settling its cases, the SEC and the New York Attorney General's Office in the past few weeks have been busy issuing subpoenas to insurers and reinsurers seeking information about other non-traditional income-smoothing products.
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