Former AIG executives accused of accounting fraud

Two former American International Group executives have settled charges brought by the US Securities and Exchange Commission for 'numerous improper accounting transactions.'

The SEC accused former chairman and CEO, Maurice 'Hank' Greenberg, and former vice chairman and CFO, Howard Smith, of being involved in 'numerous improper accounting transactions' that inflated financial results between 2000 and 2005.

According to a SEC statement, Greenberg and Smith were responsible for 'material misstatements' leading the company to create a false impression that it was meeting or exceeding earnings and growth targets.

Greenberg and Smith paid $15m (£8.9m) and $1.5m respectively to settle the charges without admitting or denying the SEC’s allegations.

Robert Khuzami, director of the SEC’s Division of Enforcement, said corporate leaders could not avoid the consequences of their companies’ performance by using improper 'accounting gimmicks'.

'Greenberg and Smith oversaw various improper transactions that presented a false financial picture and allowed AIG to claim success in meeting its performance goals.'

Read the SEC's full statement: SEC Charges Hank Greenberg and Howard Smith for Roles in Alleged AIG Accounting Violations