General Re Corporation announced today that Joseph Brandon, chairman and chief executive officer at the scandal-scarred company, has decided to resign effective immediately.
Mr. Brandon will be replaced by Franklin “Tad” Montross IV, president of General Re Corporation, the company said in a statement. Gen Re is a wholly owned subsidiary of Berkshire Hathaway Inc.
The resignation announcement, which appeared on the Berkshire Hathaway Web site, follows convictions of former top Gen Re CEO Ronald Ferguson and Christopher Garand, former Gen Re senior vice president, as well as an American International Group executive earlier this month.
All were convicted of participation in a sham reinsurance transaction designed to improperly bolster AIG's financial picture.
Federal prosecutors said the verdict sent a strong message that involvement in financial fraud schemes won't be tolerated. Mr. Brandon was not indicted in the case, but his name came up repeatedly during testimony.
The government also listed other executives as unindicted co-conspirators, including Maurice Greenberg, former AIG chairman and CEO, who left the company in 2005 when the case came under investigation and now heads C.V. Starr & Company.
A call to Berkshire Hathaway spokesman Marc D. Hamburg was not returned. The office of Gen Re spokesman Berto Sciolla in Stamford, Conn., said it had no comment.
In reaction, Standard & Poor's Ratings Services said its ratings on General Reinsurance Corp., “AAA Stable,” are unaffected by Mr. Brandon's departure.
This article updated April 15, 8:57 a.m.
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