The Securities and Exchange Commission is considering civil enforcement against Maurice "Hank" Greenberg, the former chief executive of American International Group Inc. who a judge found initiated an insurance scam, the Wall Street Journal reported Wednesday.
According to the Wall Street Journal, the SEC has issued Greenberg a "Wells notice," which indicates a possibility of an enforcement action.
Greenberg's lawyer, Robert Morvillo, and his spokesman at his company, C.V. Starr International, did not immediately reply to calls for comment.
The report of the Wells notice comes less than a week after a jury convicted four former General Reinsurance Corp. executives and a former AIG executive of conspiracy and securities fraud.
The executives were indicted for an insurance scheme that purported to transfer risk from Gen Re to AIG, but in fact inflated by $500 million the reserves AIG reported available to pay claims.
This helped AIG portray the company's finances as stronger than they really were, deceiving investors worried about whether the company had enough cash handy to pay claims. AIG paid Gen Re $15 million for undertaking this deal.
AIG has struggled to gain its footing under Greenberg's successor, Martin Sullivan. The insurer has lost more than $13 billion in the past six months and the company's stock on Wednesday touched as low as $37.28, its cheapest trade in more than a decade.
