American International Group Inc. (AIG) is close to settling their case with the SEC and the New York State Insurance Department for $1.5 billion. This settlement includes penalties as well as disgorgement of ill-gotten gains.
In May, the SEC accused two former executives of AIG of accounting fraud to enhance the company’s performance figures. This was believed to mislead both investors and regulators. The executives involved include AIG’s former chief executive officer, Maurice “Hank” Greenberg, and former chief financial officer, Howard I. Smith.
Greenberg resigned from AIG in March, after leading the company for 38 years. Both he and Smith have denied any wrongdoing.
A $1.5 billion settlement would be the largest ever by the SEC, exceeding both the $750 million settlement with WorldCom Inc. and the $850 million settlement with Marsh & McLennan Companies.