Former American International Group Inc. (AIG) CEO Maurice “Hank” Greenberg found himself again trying to bat away one probing question after the next from the witness stand Thursday, facing a prosecutor's questions about how he dealt with a colleague’s warning that AIG could face stepped up regulatory scrutiny after the 2001 Enron accounting scandal.
David Nachman, a senior enforcement lawyer for the New York Attorney General’s Office, zeroed in on a May 2002 memo issued to Greenberg by Joseph Umansky, then an AIG senior vice president. In the memo, Umansky allegedly warned Greenberg that the company might need to rethink a financial transaction — known as CAPCO — that was aimed at converting auto-warranty insurance underwriting losses into capital losses considered less harmful by investors.
“The CAPCO structure needs to be revamped in order to put us farther from criticism in today’s environment,” Umansky wrote to Greenberg, according to Nachman, who read parts of the memo aloud in Manhattan Supreme Court.
|Greenberg ‘looked to professional advice’
Nachman, leaning forward at a lectern just a couple yards from Greenberg, asked the former AIG chairman what he did in response to Umansky’s memo.
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Jason Grant
Jason Grant is a staff writer covering legal stories and cases for the New York Law Journal, the National Law Journal and Law.com, and a former practicing attorney. He's written and reported previously for the New York Times, the Star-Ledger, the L.A. Times and other publications. Contact him at [email protected]. On Twitter, pls find him @JasonBarrGrant
