American International Group Inc. could pay as much as $1.5 billion to settle civil investigations by state and federal authorities into an accounting scandal, according to published reports.
New York Attorney General Eliot Spitzer and the New York State Insurance Department filed a suit against AIG and ousted former chief executive and longtime chairman Maurice "Hank" Greenberg in May 2005, alleging that the company and Greenberg had resorted to accounting fraud to boost its financial results and stock price.
According to reports, a settlement is likely in two or three weeks, and would include a deal with the Securities and Exchange Commission. The SEC has yet to bring any charges against AIG, but it is not uncommon practice for the agency to file and settle charges on the same day. The deal does not include a settlement with Greenberg or former AIG chief financial officer Howard Smith.AIG restated five years of results in May, reducing shareholders' equity by more than $2 billion. Federal and state regulators are also investigating the company for its reinsurance activities.
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