N.Y. Attorney General Eric Schneiderman has dropped a claim for damages against Hank Greenberg, the former CEO of American International Group Inc. (AIG), reportedly in an effort to expedite a fraud case against the executive.
The lawsuit, filed in 2005 by former N.Y. Attorney General Eliot Spitzer, accused Greenberg and AIG’s former chief financial officer Howard Smith of using falsified transactions to hide the insurance company’s losses and misrepresent its financial condition.
Greenberg’s legal team argued that a recent $115 settlement between former AIG executives—including Greenberg—and a group of AIG shareholders should prevent Schneiderman from seeking “duplicative damages” from the CEO.
The attorney general’s decision to drop the damages claim “finally brings down the curtain on a series of issues of claims that were never justified and should never have been brought in the first place,” David Boies, who is representing Greenberg, told Bloomberg in a statement.
But others see Schneiderman’s tactic as a way to focus on bringing the civil fraud case to trial instead of tying up resources in a likely unsuccessful bid for damages. The attorney general’s office said in a letter to a state court judge this week that it is still seeking to ban Greenberg from participating in the securities industry or from serving as a director or officer of a publicly traded company.
For more InsideCounsel coverage of fraud issues, see: