New York (Sept. 12, 2003) -- The Securities and Exchange Commission announced Thursday that American International Group Inc. will pay $10 million to settle fraud charges stemming from its role in accounting violations at cell phone distributor Brightpoint Inc.
The SEC charged that AIG sold a dubious insurance product to Brightpoint that helped the company overstate its earnings by 61 percent by misrepresenting the company’s losses as insured losses.
AIG agreed to pay the fine, but neither admitted nor denied the agency’s charges.
"This case shows that the commission will pursue insurance companies and other financial institutions that market or sell so-called financial products that are, in reality, just vehicles to commit financial fraud," Stephen Cutler, the director of the SEC's Division of Enforcement, said in a statement.
-- WebCPA staff
