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Insurance industry

SEC and AIG: Subpoenas Issued to Decade of Executives Amid Controversial Transactions

Strategic Insights

— 1 min read

The Securities and Exchange Commission (SEC) has sent subpoenas to a dozen executives at American International Group (AIG) as part of an investigation into several transactions that may have been used to artificially bolster the insurance company's financial standing. Federal investigators have identified at least 10 transactions that warrant review, and the AIG board is considering whether to formally sever ties with Chairman Maurice R. "Hank" Greenberg. This move comes as regulatory scrutiny intensifies over a 2000 transaction that raised questions about the company's accounting practices.

Key Takeaways:

  • The SEC has issued subpoenas to a dozen AIG executives as part of an investigation into several transactions that may have been used to artificially bolster the company's financial standing.
  • At least 10 transactions have been identified as warranting review by federal investigators.
  • AIG Chairman Maurice R. "Hank" Greenberg, 79, is under scrutiny over his role in a 2000 transaction that raised questions about the company's accounting practices.
  • The AIG board is considering whether to formally sever ties with Greenberg as regulatory scrutiny mounts.
  • Qwest Communications International Inc. has issued an ultimatum to MCI Inc. to decide on a merger proposal by April 5.
  • Qwest lenders have committed an additional $500 million in financing to back the $8.45 billion merger bid.
  • Blockbuster Inc. has dropped its hostile bid to acquire Movie Gallery's merger partner, Hollywood Entertainment Inc., citing possible regulatory hurdles.

Statistics:

  • The three-month Treasury bill rate fell to 2.78 percent, the lowest in two weeks since three-month bills averaged 2.735 percent on March 14.
  • The six-month Treasury bill rate rose to 3.09 percent, the highest since 3.12 percent on September 10, 2001.
  • The average yield for one-year Treasury bills rose to 3.38 percent last week from 3.31 percent the previous week.
  • Qwest's $8.45 billion merger bid for MCI is currently worth $1.9 billion more than the Verizon deal.
  • Movie Gallery's shares surged 22 percent to close at $29.45 on Monday after Blockbuster dropped its hostile bid.

Sources:

  • "Qwest Issues Ultimatum on MCI Merger Bid" - WSJ
  • "SEC Sends Subpoenas to AIG Executives" - Reuters
  • "Three-Month Treasury Bill Rate Falls to 2.78% at Auction" - Bloomberg
  • "Blockbuster Drops Hostile Bid for Hollywood Entertainment" - AP
  • "Treasury Auctions $19 Billion in Three-Month Bills at 2.78% Discount Rate" - Federal Reserve

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