Greenberg pays $15m to settle AIG suit

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The Independent Online

Hank Greenberg has agreed to pay $15m (£9m) to settle charges over the accounting scandal that forced him out after 37 years running AIG.

The veteran insurance executive was charged, along with AIG's former chief financial officer Howard Smith, for their role in improper accounting transactions that inflated the company's results between 2000 and 2005. Mr Smith is paying $1.5m.

Neither man admitted or denied the charges, which were laid yesterday by the Securities and Exchange Commission, Wall Street's watchdog. Among other improper actions, the former executives engaged in a purported deal with an offshore shell entity to conceal multimillion-dollar underwriting losses from AIG's auto-warranty insurance business, the SEC alleged.

AIG's board of directors forced Mr Greenberg to resign in 2005 after he refused to co-operate with an internal investigation into accounting practices. He has waged a legal and public-relations feud with the company ever since.

AIG itself paid $800m to settle the SEC's accounting allegations in 2006.