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Posts Tagged ‘Hank Greenberg’

Crime Pays

Posted by Larry Doyle on August 6th, 2009 11:44 AM |

The Wall Street Journal reports that former AIG CEO Hank Greenberg has settled accounting charges brought by the SEC for $15 million. Greenberg to Pay $15 Million to Settle SEC Fraud Case.  For Greenberg, that $15 million settlement is the equivalent of leaving a nice tip after a good meal.

Recall that Greenberg recently won a case against AIG over claims to $4.3 billion of AIG stock. As Bloomberg reported on July 8th, AIG Looting Case Against Starr Was Weak.

The fact is Hank Greenberg has always been viewed as an arrogant, ruthless individual who ran AIG as his personal fiefdom. As was shared with me and I wrote this past February 24th in a post, “How Does One Lose $125 Billion?”:

It is believed by some AIG veterans that under Hank’s watch the books were cooked via a money laundering scheme centered offshore and executed through an office in New Hampshire.

The accounting malfeasance supposedly went back to the 1970s.

More than a little disconcerting.

$15 million is hardly a rounding error for Mr. Greenberg.


A Virtual Smorgasbord

Posted by Larry Doyle on March 2nd, 2009 4:24 PM |

On the heels of the news about AIG, Berkshire, and HSBC, the equity markets have found no support today and are down 4%. While the malaise of the markets has much of the focus, let’s review a few other items that I see on today’s menu:

1. In regard to AIG, current CEO Edward Liddy and former CEO Hank Greenberg have started some public feuding over the nature of AIG’s problems. Greenberg is trying to make the case that the risks underwritten at AIG occurred after his departure. Liddy responded that the culture, the compensation system, and the division housing the bulk of AIG’s risk all developed under Greenberg.  Wow!! When our country is screaming for leadership, we have senior executives playing the blame game and pointing fingers. How pathetic!! (more…)

What’s Driving the Market Lower Today?

Posted by Larry Doyle on March 2nd, 2009 9:50 AM |

markets-down-arrowStock markets are expected to open lower by another 1.5% on the open this morning. What’s driving them lower….again?

1. News that AIG reported an actual 4th quarter 2008 loss of $61 billion. The government will inject ANOTHER $30 billion into this black hole. WHY? Very simply because AIG is the largest holder of CDS (credit default swaps) that serve as insurance for a number of banks and money managers. These CDS cover a wide array of assets but primarily the sub-prime mortgage space. Kevin Doyle of 12th Street Capital, and a guest here on my weekly No Quarter Radio program back in early January, shares that the index that tracks the sub-prime market is at its lows. No surprise there.

While the various media outlets are highlighting this story now, I wrote extensively about AIG and How Does One Lose $125 Billion? on February 24th. I not only wrote about the losses, but also delved into the culture that developed over the years at AIG under Hank Greenberg.  Not a pretty picture and seemingly not a lot of integrity in that company. Now we pay. (more…)

How Does One Lose $125 Billion?

Posted by Larry Doyle on February 24th, 2009 6:00 AM |

It’s as easy as A-I-G…

While the government has pumped billions of dollars into Freddie, Fannie, the banks, the auto companies, and on and on it goes, the largest single government intervention into a private company centers on AIG. How are our investment dollars doing? reported:

“While I anticipated AIG would come back to the government begging for additional taxpayer dollars, I am disturbed that it has happened so soon,” said U.S. Representative Elijah Cummings, the Maryland Democrat who has criticized the insurer’s retention pay program, in a statement today.

The government saved AIG from collapse to prevent losses at banks that did business with the insurer.

“Counterparties around the world continue to have significant exposure to AIG, and market conditions continue to be fragile and sensitive to the potential disorderly failure of AIG,” the Fed said in a report in November.

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