Despite a published report today that American International Group might have to pay $1.5 billion to settle state and federal charges of civil fraud for inflating financial results, one analyst believes the giant insurer's finances remain bulletproof.
A settlement of that amount is "only about 1.6 percent" of the company's 2005 third quarter shareholders equity and "less than one quarter's worth of earnings," wrote Brian Meredith, an analyst with Bank of America Equity Research.
Mr. Meredith, reacting to an article today in The Wall Street Journal, also said that reaching a final settlement would be a positive for AIG stock. In early trading on the New York Stock Exchange, AIG shares were relatively unmoved by the news, selling in the $70 range.
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