On trial were Ronald Ferguson, (former chief executive of General Reinsurance, a Berkshire Hathaway subsidiary), Christopher Garand (a former Gen Re senior vice president), Robert Graham (Gen Re's former senior vice president and counsel), Elizabeth Monrad (Gen Re's former chief financial officer) and Christian Milton (former AIG vice president for reinsurance).

None of the defendants took the stand. Their defense consisted of an attack on the credibility of prosecution witnesses and a number of character witnesses.

The jury of nine men and three women spent seven days on deliberations after 23 days of trial. The defendants were convicted of conspiracy, securities fraud, making false statements to the Securities and Exchange Commission, and mail fraud.

"This is a very sad day not only for Robert Ferguson, but for our criminal justice system," said Clifford Schoenberg, an attorney for Cadwalader, Wickersham & Taft LLP in New York, representing Mr. Ferguson. "The nightmare Ron has been forced to endure these past few tortuous weeks continues. We can only hope that Judge [Christopher] Droney or the Court of Appeals will reverse this grave miscarriage of justice."

During the trial Mr. Ferguson's defense argued that he would not have taken part in a criminal enterprise that could endanger an unblemished 30 year career.

Attorney Anthony Pacheco, representing Mr. Garand, said: "Understandably, Mr. Garand is disappointed by the jury's verdict. Although this is a major hurdle, we will aggressively pursue all of Mr. Garand's rights on appeal. We expect that the Appellate Court will fully vindicate Mr. Garand of all of these government charges."

Fred Hafetz, the attorney for Mr. Milton, vowed to appeal, citing "issues of fairness" as to having his client heard along with the other defendants. During the trial Mr. Hafetz sought to have Mr. Milton's case separated from the others, but Judge Droney refused.

Federal prosecutors said the verdict sends a strong message that involvement in financial fraud schemes will not be tolerated.

"The investing public must be able to trust and rely upon corporate management to provide accurate information in their public filings," said U.S. Assistant Attorney General Alice S. Fisher of the Criminal Division in a statement. "As these convictions demonstrate, executives who violate the criminal laws by deceiving investors or aiding in that deception will be held accountable."

Chuck Rosenberg, U.S. Attorney, Eastern District of Virginia called the verdict "a strong message of deterrence and accountability" for corporate America.

Mr. Garand faces a maximum of 160 years in prison and up to $29.5 million in fines. The remaining four could receive a maximum of 230 years in prison and $46 million in fines.

All five defendants were released on a $1 million bond until their sentencing on May 15.

In addition to those on trial, the government listed a number of other executives as unindicted co-conspirators in the case, including Maurice Greenberg, former AIG chairman and CEO who was forced from the company in 2005 when the case came under investigation.

Warren Buffett, chairman of Berkshire Hathaway, the Gen Re parent, was listed as a witness for the prosecution but never appeared. The jury heard from financial analysts who said the deal had influenced their evaluation of AIG stock

Also called were two executives--John Houldsworth and Richard Napier--who pleaded to lesser charges in the case and turned government witness against the other five. Mr. Napier was a former General Re senior vice president and Mr. Houldsworth was formerly CEO of Cologne Re, Dublin, an arm of Gen Re that was involved in the deal.

Prosecutors also introduced into evidence dozens of tapes that captured some of the defendants in conversation about the deal. The recordings came from a Gen Re system that automatically recorded calls in case there was an insurance derivative trade dispute.

Mr. Napier testified to conversations he had with Mr. Ferguson where the CEO said the deal involved no real risk transfer and he wanted to keep the circle of people involved in the deal small.

In one recorded conversation between Mr. Napier, Ms. Monrad and Mr. Houldsworth, Mr. Houldsworth told Ms. Monrad, "If there's enough pressure on at [AIG's] end, they'll find ways to cook the books, won't they?" and "We won't help them do that much...We'll do nothing illegal," to which Ms. Monrad replied, "Right."

In their defense, attorneys argued that none of the executives intentionally broke the law.