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•That also consisted a penalty of $80 million
•Also, disgorgement and prejudgment interest of $42 million
•Hank Greenberg Had to pay $115m for stakeholder lawsuits
•Legal fees of up to $150m for Hank Greenberg and Howard Smith
•AIG’s net worth dropped significantly and they lost the trust of their investors
and of other companies
•The company’s CEO and CFO were replace
•In February 2006, the matter was taken to court
•They alleged violation of 16 counts of the criminal action
•Conspiracy (1 count)
•Securities Fraud( 7 counts)
•False statements to Sec (5 counts)
•Mail Fraud (3 counts)
•The company agreed to pay off a total $126 million to settle fraud charges with the Sec
•CEO Hank Greenburg did a lot of other wrong things as well
•He booked loans as revenue
•Steered clients to insurers with whom AIG had payoff agreements
•Told traders to inflate stock prices
• The CFO, Howard Smith supported Hank Greenberg in these small scandals as well
•In the march of 2005 the company exposes that the reinsurance deal with Gen Re should have been accountant as a deposit
•In particular, they engaged in two big improper insurance transactionsThat gave investors the impression that the Company has large reserves for claim than it did
• In the mid of 2005, AIG admits that they had done improper accounting
•The company had engaged in misleading accounting and financial reporting
• In 2000, Security Exchange commission recognized that AIG assisted a client company in strengthening their balance sheet through a fake insurance transaction
• Till 2003 the investigation was continuing after which SEC and Justice Department settled with AIG for a penalty of $10milliion.
•In 2004, federal grand jury started investigating about the company’s smoothing products
•Also in 2004, a big rigging complaint was filed against the company
•Hank Greenberg ,CEO of AIG
• Joined AIG in 1962 and was named CEO in 1968.
• led AIG for 38 years. He stepped down on March 21, 2005.
• Christian Milton; he was the VP of AIG’s reinsurance until 2005.
-American Insurance Group Scandal (AIG) is a leading international insurance organization serving more than 88 million customers in 130 countries
- AIG's primary activities include both general and life insurance operations.
-The history of AIG leads back to 1919. It started in Shanghai
-It is considered as one of the largest insurance company in the world.
- Year that ended December 31, 2004, AIG had total (revised) revenues of almost $98 billion and approximately 92,000 employees
-During the time of the scandal It was led by Hank Greenberg.