NU Online News Service, Oct. 26, 3:15 p.m. EDT
Maurice "Hank" Greenberg denied any wrongdoing and was roundly critical of a New York State judge's decision finding the former American International Group chief executive liable for a scheme to hide losses.
A statement issued by Mr. Greenberg's attorneys yesterday said that "he has always rigorously denied participation in or knowledge of any wrongdoing connected to a reinsurance transaction between AIG and Gen Re some 10 years ago."
The attorneys said that over that period of time no one has ever come forward to directly dispute Mr. Greenberg's assertions.
Last Thursday, New York State Supreme Court Judge Charles E. Ramos held Mr. Greenberg liable for damages on a reinsurance contract that the state's attorney general said helped AIG hide losses from 2001 to 2004.
The scheme, known as the Capco Transaction, allegedly hid more than $200 million in losses from an auto warranty insurance program. The losses were part of a restatement the company had to make for the years 2001 to 2004.
In their statement, the attorneys said, "The Capco Transaction, which has been deemed impermissible by Justice Ramos on an entirely novel theory, was structured and reviewed by at least 20 different attorneys at AIG. The evidence conclusively establishes that Mr. Greenberg was specifically advised that the form of the transaction would meet the requirements of all legal, regulatory and tax laws. As any chief executive officer, Mr. Greenberg had a right to rely upon this advice from his experts. Inexplicably, the opinion of Justice Ramos rejects this fundamental principle of corporate governance.
"Mr. Greenberg is confident that his appeal will reestablish the standards governing corporate executive reliance and responsibility and the appropriateness of his conduct," the statement concluded.
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