Spitzer Comment Sends AIG Stock Up
By Michael Ha
NU Online News Service, April 5, 1:40 p.m. EDT?The stock price of American International Group skyrocketed more than 7 percent in less than 30 minutes yesterday afternoon following New York Attorney General Eliot Spitzer's announcement that he expects a "civil resolution" with the insurer.[@@]
The afternoon rally added billions of dollars in market capitalization back to AIG, whose stock price had fallen some 20 percent since Feb. 14, when it was announced that the company was subpoenaed by Mr. Spitzer's office and the Securities and Exchange Commission.
AIG's share price hit a two-year low on April 1, two days after the company revealed that its ongoing internal review had unearthed "improper" finite reinsurance accounting with General Re and other problems in its bookkeeping methods, with possible adjustments adding up to a book-value loss of $1.66 billion.
Mr. Spitzer's statement eased concern that the New York attorney general's investigation into AIG might lead to criminal charges. "The board and current management of the company are now cooperating with this investigation...We believe that a civil resolution with the corporation will ultimately be achievable," according to the statement from Mr. Spitzer's office.
AIG, however, remains the focus of a variety of investigations by the Securities and Exchange Commission as well as state insurance regulators.
AIG shares ended Monday's trading at the New York Stock Exchange at $53.30 per share.
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