Jury Gets AIG, SICO Case

In return, AIG attorney Theodore Wells accused Maurice R. Greenberg, the former AIG chief executive who remained in charge of SICO, of lying on the witness stand about permitted uses for the stock.

A key issue before the jury and Judge Rakoff is whether a trust ever existed at SICO to pay deferred incentive compensation in retirement to select AIG employees. If that trust existed, AIG argued, then stock SICO sold in 2005 to finance its expansion violated that trust.

Subsequently, SICO would owe AIG somewhere between $2.9 billion to $4.3 billion in damages for the value of that stock, according to Mr. Wells.

In closing after more than three weeks of trial, Mr. Boies spent Monday afternoon disputing claims made earlier by Mr. Wells that Mr. Greenberg, the current chief executive of SICO, lied on the witness stand about the compensation plan.

Mr. Boies told an intently listening jury that, from the time the plan was created in 1975 through 2005, Mr. Greenberg was as consistent in describing the plan then as he was in court.

"There is no basis for any of the charges made against Mr. Greenberg today," declared Mr. Boies.

Mr. Greenberg spent seven days on the witness stand and was present for the summations.

From the creation of the AIG companies in 1970, through the formation of the deferred compensation program in 1975, and the subsequent years until the program was discontinued in 2005, there was never any record or document establishing a trust by AIG within SICO for the program, argued Mr. Boies.

It was not until Mr. Greenberg was forced out of AIG and SICO filed a lawsuit seeking the return of art work from AIG in 2005 that there was mention of a trust. The existence of the trust "has been made up for this litigation" and was in retaliation for SICO's suit, he said, adding, "It is simply a trust that doesn't exist."

During his summation, Mr. Wells pointed to speeches Mr. Greenberg made about the program over the 35 years of its existence, saying that in those speeches he "told the truth that the stock was put in trust to pay future generations of AIG employees."

He called Mr. Greenberg's testimony a contradiction of the facts, saying the former AIG chief executive "lied in this court" and "I submit that it was all false testimony."

He said the program was ended not by a mutual understanding between AIG and SICO but because of Mr. Greenberg's anger over being dismissed from the company.

When Mr. Greenberg left AIG in 2005, the company was in the midst of an accounting scandal–something that was not discussed in court.

Mr. Wells claimed other actions by SICO showed "a consciousness of wrongdoing."

Referring to Mr. Greenberg's statements, he said, "These are not small lies; they are big lies." He added, "There is a certain arrogance, almost audacity of arrogance."

The jury, which began deliberating this morning, will have to determine whether SICO is liable for breach of trust and, if so, how much the damage award should be.

However, Judge Rakoff said in an order prior to the trial that he will ultimately make the decision on AIG's claim that there was an express trust/breach of fiduciary duty and the jury's decision will be in an advisory capacity, with the judge making his "own independent findings of law and of fact on the equitable claims"