AIG Lawyer Reveals Plundering of Retirement Program by Ex-CEO

An AIG lawyer contends that former CEO Hank Greenberg illegally sold over $4 billion worth of stock owned by a retirement trust fund, though the intricate legalities of the case are more convoluted than the contention indicates.

Apparently angered at being forced out of American International Group, Inc. (AIG), ex-CEO Maurice “Hank” Greenberg allegedly removed $4.3 billion in stock from the company in 2005 immediately after he was removed from his post by the company for accounting irregularities. AIG attorney Theodore Wells, speaking to a jury, noted, “Hank Greenberg was mad. He was angry,” further noting that the story of Greenberg and his misdeeds was one of “anger, betrayal and cover-up.” Greenberg had been with the company for 35 years, growing it from a very small company into the world’s largest provider of insurance.

Wells went on to detail the trust fund from which Greenberg was alleged to have removed funds, explaining that it had been set up many years ago to provide bonuses to a small group of AIG managers and other well-paid employees. Wells then asked the jury to aware AIG $4.276 billion and 185 million AIG shares.

For his part, Greenberg has specifically noted that he had the right to sell the shares because they were owned by Starr International, a privately-held company controlled by Greenberg. Greenberg’s lawyer, David Boies, noted, “I disagree with a great many things that Mr. Wells said. Look in this case not to what people said after the lawsuit started. Look to what they said and did and wrote before the lawsuit started.” AIG lawyers further argued that Greenberg and Cornelius Vander Starr, Greenberg’s successor and the man after whom Starr International was named, decided in 1970 that a large portion of the shares owned by the smaller company would be used only to compensate AIG employees.

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