NEW YORK -- The former top executive of American International Group Inc. plundered an AIG retirement program of billions of dollars because he was angry at being forced out of the company, a lawyer for AIG told jurors today at the start of a civil trial. Attorney Theodore Wells told the jury in Manhattan that former AIG Chief Executive Officer Maurice "Hank" Greenberg improperly took $4.3 billion in stock from the company in 2005, after he was ousted by the company amid investigations of accounting irregularities. "Hank Greenberg was mad. He was angry," Wells said in U.S. District Court of the emotional state of the man who, over a 35-year-career, built AIG from a small company into the world's largest insurance provider. He said the saga is a story of "anger, betrayal and cover-up." Wells said that Greenberg, within weeks of being forced out in mid-2005, gave the go-ahead for tens of millions of shares to be sold from a trust fund. The fund was set up to provide incentive bonuses to a select group of AIG management and highly compensated employees that they would receive upon their retirement.
Attorney Theodore Wells told the jury in Manhattan that former AIG Chief Executive Officer Maurice "Hank" Greenberg improperly took $4.3 billion in stock from the company in 2005, after he was ousted by the company amid investigations of accounting irregularities.
"Hank Greenberg was mad. He was angry," Wells said in U.S. District Court of the emotional state of the man who, over a 35-year-career, built AIG from a small company into the world's largest insurance provider. He said the saga is a story of "anger, betrayal and cover-up."
Wells said that Greenberg, within weeks of being forced out in mid-2005, gave the go-ahead for tens of millions of shares to be sold from a trust fund. The fund was set up to provide incentive bonuses to a select group of AIG management and highly compensated employees that they would receive upon their retirement.
Greenberg, 84, has contended through his lawyers that he had the right to sell the shares because they were owned by Starr International, a privately held company he controlled. Greenberg's lawyer, David Boies, told the jury in his opening statement that the shares sold by his client did not belong to AIG. "I disagree with a great many things that Mr. Wells said," Boies told the jury. He said a study of the documents in the case would prove that the shares sold by Greenberg did not belong to AIG.
Greenberg's lawyer, David Boies, told the jury in his opening statement that the shares sold by his client did not belong to AIG.
"I disagree with a great many things that Mr. Wells said," Boies told the jury. He said a study of the documents in the case would prove that the shares sold by Greenberg did not belong to AIG.
How can a company the size of AIG not know for sure who owned the shares? (Unless there was a fraudulent transfer of ownership?)
Funnily enough, France's biggest insurer, AXA, was also a one-man show, being built up from a very small local insurer in Normandy into the behemoth it is by Claude Bébéar, but at least he handed over the reins to others in a more controlled and transparent fashion.
But I still fidn it amazing that two of the biggest companies in the world, controlling trillions of money, were essentially controlled by one guy each for a very long time. In the long run, we're all dead. John Maynard Keynes
Because AIG was, despite its huge size, a one-man show - Greenberg's. He was kicked out in the end, but the transition was not smooth and he knew more about the company from the outside than the insiders, given that he had built it up.
Brief history:
AIG history dates back to 1919, when Cornelius Vander Starr established an insurance agency in Shanghai, China. Starr was the first Westerner in Shanghai to sell insurance to the Chinese, which he continued to do until AIG left China in early 1949--as Mao Zedong led the advance of the Communist People's Liberation Army on Shanghai. Starr then moved the company headquarters to its current home in New York City. The company went on to expand, often through subsidiaries, into other markets, including other parts of Asia, Latin America, Europe, and the Middle East. In 1962, Starr gave management of the company's lagging U.S. holdings to Maurice R. "Hank" Greenberg, who shifted its focus from personal insurance to high-margin corporate coverage. Greenberg focused on selling insurance through independent brokers rather than agents to eliminate agent salaries. Using brokers, AIG could price insurance according to its potential return even if it suffered decreased sales of certain products for great lengths of time with very little extra expense. In 1968, Starr named Greenberg his successor. The company went public in 1969.
In 1962, Starr gave management of the company's lagging U.S. holdings to Maurice R. "Hank" Greenberg, who shifted its focus from personal insurance to high-margin corporate coverage. Greenberg focused on selling insurance through independent brokers rather than agents to eliminate agent salaries. Using brokers, AIG could price insurance according to its potential return even if it suffered decreased sales of certain products for great lengths of time with very little extra expense. In 1968, Starr named Greenberg his successor. The company went public in 1969.
