BusinessCompany NewsFormer AIG executives accused of accounting fraud

Former AIG executives accused of accounting fraud

SEC accuses former executives of numerous improper accounting transactions

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

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