Supreme Court Declines Hank Greenberg Appeal in N.Y. Civil Fraud Case -- Update
December 12 2016 - 11:08AM
Dow Jones News
By Brent Kendall
WASHINGTON -- The U.S. Supreme Court on Monday declined to
consider an appeal by former American International Group Inc. CEO
Maurice "Hank" Greenberg, who was seeking dismissal of a civil
fraud case brought a decade ago by the New York attorney
general.
The 91-year-old Mr. Greenberg and Howard Smith, AIG's former
chief financial officer, are fighting allegations they engaged in
two fraudulent transactions that misled investors about the
company's financial health.
Eliot Spitzer brought the case when he was state attorney
general in 2005. After many years of pretrial wrangling, the trial
finally began in a state court in September. The trial is currently
on hold while lawyers for Mr. Greenberg and New York's attorney
general Eric Schneiderman attempt mediation to resolve the
matter.
The state's current attorney general, Eric Schneiderman, is
seeking to bar the men from serving as directors or officers of a
public company, and to have them give up tens of millions of
dollars in bonuses.
Even as the trial is proceeding, the defendants had appealed to
the U.S. Supreme Court, arguing the state's case was pre-empted by
federal law. They argued the New York attorney general was
undermining the uniform national regulation of securities
markets.
Mr. Greenberg and Mr. Smith already settled with the Securities
and Exchange Commission in 2009, agreeing to pay $15 million and
$1.5 million, respectively. They neither admitted nor denied
wrongdoing.
AIG in 2006 settled fraud charges related to its accounting
scandal, a $1.6 billion pact with the SEC, the Justice Department
and the New York attorney general.
Mr. Schneiderman in a brief filed with the Supreme Court said
the former AIG executives' legal arguments were incorrect. He also
said the justices shouldn't consider taking up the appeal while the
case was still proceeding in the lower courts.
The Supreme Court turned away the executives' appeal in a
one-line order.
Leslie Scism contributed to this article
Write to Brent Kendall at brent.kendall@wsj.com
(END) Dow Jones Newswires
December 12, 2016 10:53 ET (15:53 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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