Investors and analysts who follow American International Group boosted the company's stock yesterday when a civil suit filed by New York authorities against the company produced no new allegations of wrongdoing.
AIG stock soared more than 3 percent on the New York Stock Exchange. The action filed by New York Attorney General Eliot Spitzer and New York State Insurance Superintendent Howard Mills names as defendants AIG as well as two of its ex-executives, former Chief Executive Maurice Greenberg and former Chief Financial Officer Howard Smith, for allegedly manipulating AIG's accounting.
William Wilt, analyst from New York-based Morgan Stanley, noted in his research note that investors have "already warmly greeted the absence of heretofore unknown allegations" emerging from the complaint.
Mr. Wilt said the complaint, for the most part, discusses alleged illicit activities that have already been disclosed by AIG itself in a May advisory. Mr. Wilt concluded that there were "no new revelations that we saw" in the complaint.
The next event AIG watchers are now anticipating is the filing of AIG's much-delayed 10-K annual report for 2004, scheduled to be filed by early next week after two previous postponements.
Mr. Wilt said he is now optimistic that AIG's latest self-imposed 10-K filing deadline will be met.
New York-based investment firm Prudential Equity Group said the market can now turn its attention to the next three AIG catalysts on the horizon. They are: the filing of AIG's 2004 10-K, settlement with regulators and the reporting of 2005 first-quarter earnings. "It is our expectation that AIG is successful in meeting its commitment to provide its 2004 annual filings by May 31st. We think we're finally getting closer to the end of this saga," Prudential stated.
The Goldman Sachs Group Inc., a New York-based investment banking and advisory firm, said it sees the civil complaint as a net positive. "The complaint appears to focus on a very narrow group of individuals who appeared to have been behind various transactions that influenced AIG's historical results. Second, the complaint probably sets the stage for negotiations between AIG and the NYAG as to potential fines or penalties," Goldman Sachs stated.
UBS AG, an investment management firm, also added: "We continue to think a settlement may soon follow the filing of the civil suit and there is a fair chance that the 10-K will be filed on schedule."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.