HARTFORD, CONN.–A Merrill Lynch analyst testifying at the securities fraud trial of five insurance executives testified that after he looked at American International Group reserves, that prosecutors say were inflated with a sham transaction, he sent out a positive investors note.

Jay Cohen, who has been a property-casualty insurance analyst with Merrill since 1995, appeared as a government witness to give evidence concerning the deal that took place between the last quarter in 2000 and first quarter of 2001.

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