AIG's Greenberg Retires Amid Regulatory Scrutiny

Maurice "Hank" Greenberg is retiring as chairman of American International Group Inc. after being ousted as CEO due to regulatory probes into the company's financial transactions. Greenberg, who will end his 37-year career atop AIG later this week, faces an expanding probe by the Securities and Exchange Commission and New York State Attorney General Eliot Spitzer. Meanwhile, Berkshire Hathaway Inc. has confirmed that its chairman and CEO, Warren Buffett, has been called by regulators to answer questions next month.

Key Takeaways:

• AIG's board ousted Greenberg as CEO on March 14 due to intensifying regulatory probes into the company's financial transactions.
• The SEC and Spitzer's investigators are examining reserve transactions between AIG and General Re Corp. that regulators contend were designed to improve AIG's financial statements without the transfer of risk.
• AIG has fired three executives for not cooperating with investigators, and it remains unclear how much Greenberg will say as part of the probes.
• Buffett has been called to answer questions on April 11 about documents and witnesses that indicate he was involved in discussions about the transaction between General Re and AIG.
• AIG's lead director, Frank G. Zarb, will assume the duties of chairman until a new one is selected.
• Spitzer praised AIG's board for making "difficult decisions" and acting in a way that sets it apart from other boards facing similar problems.

Statistics:

• AIG's revenues approach $100 billion.
• The SEC has issued subpoenas for a dozen AIG executives.
• Investigators have uncovered 10 financial transactions that warrant greater scrutiny.
• Buffett is 74 years old.
• Greenberg will end his 37-year career atop AIG later this week.

Sources:

• The Associated Press
• The Wall Street Journal
• New York State Attorney General Eliot Spitzer
• Warren Buffett, Berkshire Hathaway Inc.
• Frank G. Zarb, AIG
• The Journal, citing unidentified sources familiar with the case.