Our long national nightmare is over: A dozen years after he annoyed Eliot Spitzer enough to get himself sued by the former New York attorney general (admittedly not a particularly difficult thing to do), former AIG CEO Maurice “Hank” Greenberg has finally decided to put all of the nothing wrong he did behind him. Having spent all of his 80s battling Spitzer, Spitzer’s successor and Spitzer’s successor’s successor over allegations that they fraudulently covered up just how close to collapse AIG was, Greenberg decided he’d rather spend his 90s pursuing other interests. And so he can, because N.Y.A.G. Eric Schneiderman dropped his office’s longtime insistence that Greenberg and ex-AIG CFO Howard Smith not work in the securities industry or any public company anymore to get the deal done. We also know that Snowflake’s inheritance is mostly safe, since Greenberg only has to pay his share of the $9.9 million in bonuses he and Smith got back in 2001-2004.
Those things, we know. Everything else about the settlement, however, is apparently open to interpretation. Here’s Schneiderman’s:
Today’s agreement settles the indisputable fact that Mr. Greenberg has denied for 12 years: that Mr. Greenberg orchestrated two transactions that fundamentally misrepresented A.I.G.’s finances.
Here’s Greenberg’s official take for settlement purposes:
As a result of these transactions, AIG’s publicly-filed consolidated financial statements inaccurately portrayed the accounting, and thus the financial condition and performance for AIG’s loss reserves and underwriting income. The accounting for the Gen Re transaction was correctly restated by AIG in AIG’s 2005 restatement.
And here’s what he says all of that legalese means:
“This has been going on for 12 years,” he added. “The settlement I think brings out the facts, in the sense that it had no effect. The things I’ve been accused of had no effect on shareholder earnings per share.”
And he’s what his lawyer says it means:
In an interview, David Boies, Mr. Greenberg’s lawyer, called the agreement a “nuisance settlement….”
Boies went further, saying in a statement that Schneiderman’s remarks were "false and misleading” and put a positive spin on a settlement that netted a fraction of what the state previously sought. “Nowhere in the agreed statement by Mr. Greenberg is there any reference to any accounting being fraudulent, let alone that Mr. Greenberg was aware of any fraud,” Boies said.
Luckily, Hank has spent his morning and early afternoon clearing things up.
“The language in the settlement by the mediator and both sides—the word fraud is never used and it shouldn’t have been.” Greenberg said. “Yet after the announcement, Schneiderman put out a release and went back and used the word fraud even though he had signed off on the language as he should have….”
“We were a company in 137 countries, we had thousands and thousands of employees—yes, people make mistakes periodically. That’s not fraud,” he said….
He added, “I feel good that it’s over, but that’s not vindication, not yet,” he said. “[The New York Attorney General] owes me an apology.”
Good to know this angry old man still has something to live for.
Former A.I.G. Executives Reach Settlement in Accounting Fraud Case [DealBook]
Greenberg Admits Aiding in Fraudulent Deals in AIG Settlement [Bloomberg]
Fmr. AIG CEO Hank Greenberg Talks $9.9M Settlement in 12-Year Fraud Case [Fox Business]