AIG lawyer: Ex-top exec plundered billions of dollars from retirement plan

AIG lawyer: Ex-top exec plundered billions of dollars from retirement plan

Post by NewsToBeRea » Wed, 17 Jun 2009 16:10:57

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AIG lawyer: Ex-top exec plundered retirement plan
AIG lawyer tells jury that Greenberg plundered retirement program after
being forced out
  a.. Madlen Read, AP Business Writer
  b.. On Monday June 15, 2009, 9:35 pm EDT
NEW YORK (AP) -- The former top executive of American International Group
Inc. plundered an AIG retirement program of billions of dollars because he
was angry at being forced out of the company, a lawyer for AIG told jurors
Monday at the start of a civil trial. Attorney Theodore Wells told the jury
in Manhattan that former AIG Chief Executive Officer Maurice "Hank"
Greenberg improperly took $4.3 billion in stock from the company in 2005,
after he was ousted by the company amid investigations of accounting
irregularities.

"Hank Greenberg was mad. He was angry," Wells said in U.S. District Court of
the emotional state of the man who, over a 35-year-career, built AIG from a
small company into the world's largest insurance provider. He said the saga
is a story of "anger, betrayal and cover-up."

Wells said that Greenberg, within weeks of being forced out in mid-2005,
gave the go-ahead for tens of millions shares to be sold from a trust fund.
The fund was set up decades ago to provide incentive bonuses to a select
group of AIG management and highly compensated employees that they would
receive upon their retirement.

Wells showed the jury several clips of Greenberg speaking on videotape about
the responsibilities of the trust fund. He called it Greenberg's "videotaped
confession."

Wells asked the jury to award AIG $4.276 billion and 185 million AIG shares.

Greenberg, 84, has contended through his lawyers that he had the right to
sell the shares because they were owned by Starr International, a privately
held company he controlled.

Greenberg's lawyer, David Boies, told the jury in his opening statement the
shares sold by his client did not belong to AIG.

"I disagree with a great many things that Mr. Wells said," Boies told the
jury. He said a study of the documents in the case would prove that the
shares sold by Greenberg did not belong to AIG.

"Look in this case not to what people said after this lawsuit started,"
Boies said. "Look to what they said and did and wrote before the lawsuit
started."

Starr International was named after Cornelius Vander Starr, who created a
worldwide network of insurance companies in the early 1900s.

AIG maintains that Starr and Greenberg, his protege and successor, decided
in the late 1960s to organize the various companies under one holding
company, AIG.

Starr International remained a private company and its shareholders decided
in 1970 that the amount that its shares of AIG were worth above book value
of about $110 million should be used to compensate AIG employees, AIG has
said.

The embattled insurer is trying to reclaim the money from Starr it says was
wrongly pocketed through stock sales by Greenberg.

The trial relates to events that occurred long before AIG found itself under
attack earlier this year over its bonus program.

The company was roundly criticized after it accepted $182 billion in federal
aid and then paid out $165 million in bonuses to employees, including
traders in the financial products unit that nearly caused the company to
collapse.

Before the jury was chosen Monday, U.S. District Judge Jed S. Rakoff said
evidence in the trial could not include information about the government
bailout. He also said the entire trial will last no longer than a month.
Witnesses begin testifying Tuesday; Greenberg is among one of several
witnesses expected to take the stand this week.

The trial features two legal heavyweights.

Boies argued on behalf of Democratic presidential candidate Al***before
the U.S. Supreme Court during the disputed presidential vote in 2000. Wells
was on the team of defense lawyers in 2007 for former White House aide I.
Lewis "Scooter" Libby, who was convicted of perjury, obstruction and lying
to the FBI about his role in leaking the name of a CIA operative to a
reporter.