In a memo to federal regulators, lawyers for American International Group Inc.'s former chief executive outlined a case that the company's $3.9 billion earnings restatement was unnecessary and that any blame lay with its auditor of the past two decades, PricewaterhouseCoopers.
In the 50-page document, recently released to the public, lawyers for Maurice "Hank" Greenberg wrote that both the insurance company and PwC knew in advance that retroactive accounting readjustments were to be made. The lawyers added that it was the accounting firm's responsibility to have brought forward concerns to AIG's audit committee earlier.
Both Greenberg and AIG were named in a fraud lawsuit brought by New York Attorney General Eliot Spitzer, and investigations by the U.S. Justice Department and the Securities and Exchange Commission. In June, Greenberg resigned from AIG's board, after running the company for nearly 40 years. The suit accuses Greenberg of misleading regulators and investors by using sham reinsurance contracts. AIG restated five years of earnings, lowering its net income by 10 percent, and saw its market value fall by almost $35 billion.
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