AIG Fires Smith & Milton In Probe

AIG Fires Smith & Milton In Probe

By Daniel Hays

NU Online News Service, March 22, 9:11 a.m. EST?Two high-ranking executives at American International Group with involvement in the company's reinsurance activities were let go yesterday for failing to cooperate with an accounting probe, the company confirmed.[@@]

Both Howard Smith, chief financial officer, and Christian Milton, vice president for reinsurance, had previously been announced as "on leave." The two were dismissed after invoking their Fifth Amendment rights in the course of a government investigation.

AIG has been under scrutiny from both the Securities and Exchange Commission and New York Attorney General Eliot Spitzer's office. The focus of the inquiry has been on AIG's involvement with transactions investigators believe could serve as income-smoothing devices that improved a corporate financial picture.

Chris Winans, an AIG spokesman, confirmed this morning that the two had been dismissed as part of company policy requiring employees to cooperate with government authorities on matters pertaining to the company.

The continuing government scrutiny has also led to the replacement of AIG's longtime chief executive officer, Maurice Greenberg, who remains with the company in the post of non-executive chairman.

Mr. Greenberg was replaced by Martin J. Sullivan, who had been serving as co-chief operating officer. Mr. Smith was replaced by Steven J. Bensinger, treasurer and comptroller.

Because of the ongoing probes into its accounting, AIG has delayed the filing of its annual 10-K financial report with the SEC, and its stock has plummeted amid speculation a major readjustment could be announced.