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Let A Jury Decide Whether Hank Greenberg Is Fit To Still Be Running An Insurance Company (Into The Ground Or Otherwise)

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Snowflake Greenberg may yet suffer the indignity of seeing his beloved master stripped, in his prime at 88, of his right to run public companies.

New York state's highest court handed a victory to the state's attorney general, allowing him to proceed to trial on charges of alleged civil fraud by former American International Group Inc. Chief Executive Maurice "Hank" Greenberg, denying the defendants' effort to get the case dismissed….

In April, Eric Schneiderman, New York's current attorney general, dropped the state's claim for potentially billions of dollars in damages, instead focusing on remedies such as a ban from participation in the securities industry and a ban on serving as an officer or director of a public company.

In a ruling released Tuesday, the state's highest court said there was sufficient evidence to allow the case to proceed to trial, and that the state wasn't barred from seeking bans and other relief.

"We have no difficulty in concluding that, in this civil case, there is evidence sufficient for trial that both Greenberg and Smith participated in a fraud. The credibility of their denials is for a fact finder to decide," the court wrote.

It all feels like vindication to Eliot Spitzer. Partial, to be sure, but sweet, sweet vindication.

The case was first filed in 2005 by then-Attorney General Eliot Spitzer. As Mr. Spitzer's probe into alleged accounting improprieties at the company had widened, AIG's board forced the resignation of Mr. Greenberg, who had transformed the company from obscurity into a global powerhouse over a nearly four-decade run….

Mr. Spitzer called arguments that the case shouldn't proceed "frivolous" and "absurd."

"The Court of Appeals decision says precisely what I said for years about this case. The record and the evidence are clear," Mr. Spitzer said in an interview. "There's evidence this conspiracy of illegal conduct began with Hank Greenberg. Only the acolytes of Hank Greenberg ever tried to refute that fact. It's been true since we brought the case and continues to be true. It will be proven in a court of law."

N.Y.'s High Court OKs Continued Claims Against Ex-AIG Chief Greenberg [WSJ]


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