NewsMine — cabal-elite — corporate — accounting-fraud — Viewing Item

AIG used hedge funds to report gains Original Source Link: (May no longer be active)    http://www.bloomberg.com/apps/news?pid=10000103&sid=aFmwGf5UbtG8&refer=us http://www.bloomberg.com/apps/news?pid=10000103&sid=aFmwGf5UbtG8&refer=us AIG May Delay Filing, Increase Estimate of Errors (Update5) April 29 (Bloomberg) -- American International Group Inc., the world's largest insurer, plans to delay its 2004 financial report for a third time as the company reviews accounting errors that will probably cut net worth by more than the $1.7 billion it previously estimated, people familiar with the matter said. AIG yesterday told regulators examining the accounting that the company expected to miss its May 2 target date for filing the report, one of the people familiar said. Auditors want a more exhaustive review of AIG's books by law firms Paul Weiss Rifkind Wharton & Garrison and Simpson, Thacher & Bartlett, said another person, declining to be identified. A third delay in six weeks may prolong probes by New York Attorney General Eliot Spitzer and the U.S. Securities and Exchange Commission and add to investor concern about the size of an earnings correction anticipated by AIG. The investigations of reinsurance abuses led to last month's ouster of Maurice ``Hank'' Greenberg as AIG's chief executive officer and have erased more than $57 billion of its market value. ``A big start to restoring the confidence in the company would be an auditor signing off on the results,'' said Stuart Quint, an analyst who helps manage $74 billion at Gartmore Global Investments in West Conshohocken, Pennsylvania, including more than 780,000 shares of New York-based AIG as of December. AIG is set to announce before the stock market opens May 2 that improper accounting will result in a total reduction of $2.7 billion to $2.9 billion in the company's net worth, or as much as $1.2 billion more than the company estimated March 30, the New York Times reported earlier today, citing unidentified sources. Offshore Reinsurers AIG spokesman Chris Winans declined to comment, as did Spitzer spokesman Darren Dopp and SEC spokesman John Heine. Mark Pomerantz, the lead Paul Weiss attorney on the AIG case, didn't return an e-mail seeking comment. Simpson Thacher attorney Dick Beattie and Frank Zarb, interim chairman of AIG's board, didn't return phone calls. Shares of AIG are down 31 percent since the company said on Feb. 14 that it received subpoenas on its accounting. The stock fell 58 cents to $50.56 at 2:54 p.m. in New York Stock Exchange composite trading. AIG first disclosed accounting improprieties on March 30, saying deals with reinsurers, including Warren Buffett's Berkshire Hathaway Inc., manipulated its finances and may have helped to inflate its net worth by 2 percent, or $1.7 billion. The company said contracts with offshore reinsurers understated its losses from claims and complex bond transactions inflated its investment income. The admissions cost the company its AAA credit rating. Hedge Funds The Times reported AIG has since brought two more issues to the attention of regulators, including whether money was moved out of certain outside hedge funds and then later returned to allow AIG to book investment gains. The company was also asked by auditors to re-examine its accounting of derivatives in light of new interpretations of accounting rules, the paper said. Dennis Nally, chairman of PricewaterhouseCoopers LLP, AIG's auditor, said yesterday that AIG was working to get the report filed. He declined to comment on the timing. ``The firm is working very diligently with that organization to get through all that work,'' Nally told reporters at a press conference in Washington. ``As you might imagine, it's a significant undertaking. We have a number of resources assigned to help in that process.'' Spitzer and the SEC are investigating instances where a type of reinsurance known as ``finite'' really amounts to loans, allowing companies to mask losses even though little or no risk is transferred. The CEOS of insurers Genworth Financial Inc. and Hartford Financial Services Group Inc. today distanced themselves from the industrywide probe in separate interviews. `See Nothing' ``I see nothing in the finite reinsurance area, where we did conduct a review, that would impact the company,'' said Michael Frazier, the CEO of Genworth. Hartford's Ramani Ayer said his company has not ``been a big buyer or seller'' of the products. Greenberg, 79, has asked to see a copy of the Paul Weiss- Simpson Thacher report on AIG's transactions. He invoked his Fifth Amendment right against self-incrimination in an April 12 deposition with investigators, refusing to answer questions. ``We are disappointed that AIG continues to refuse to give Mr. Greenberg an opportunity to know and respond to the points contained in AIG's forthcoming report,'' said David Boies, one of Greenberg's attorneys, in an e-mailed statement today. ``We believe that refusal is both unfair to Mr. Greenberg and likely to lead to a less accurate and complete report.'' AIG has fired or suspended at least five executives, including former Chief Financial Officer Howard Smith, in the probe. Last Updated: April 29, 2005 15:00 EDT

Adelphia founder and son convicted of fraud { July 9 2004 } Adelphia jailed AIG used hedge funds to report gains Bank one mutual fund fraud probe { November 27 2003 } Banks deleted email Bristol meyers Bush angered speech { June 28 2002 } Bush cheney hens { July 9 2002 } Bush stock sell { July 21 2002 } Bush violated laws Cheney Citigroup morgan Citigroup skirt rules Congress grills banks Corporate reforms reassessed { July 23 2004 } Ernst young auditing firm barred auditing six months { April 17 2004 } Everybody outraged { July 2 2002 } Gore bashes bush Harken energy bush { July 12 2002 } Insurance accounting fraud by buffett subsidiary Insurance AIG cooks books and apologizes { February 10 2006 } Lieberman soft on corporate crooks { July 29 2002 } Lynch enron scam { August 8 2002 } Martha stewart convicted Martha stewart seeks retrial after government perjury Mccain proposal { July 12 2002 } New york chinatown bank rush { April 22 2003 } Newscorp worldcom No corporate reform { June 10 2002 } On wall street a rise in dismissals over ethics { March 29 2005 } Post saves bush { July 12 2002 } Qwest admits Scandal closes mutual fund security trust { November 26 2003 } Scandal markets { June 26 2002 } Schwab mutual funds improper trading { November 14 2003 } Sec charges dallas firm with fraud { December 5 2003 } Sec probes disney { December 4 2002 } Sec probing ibm { June 2 2003 } Sec told to get tough mutual fund fraud Secret service stewart witness charged with perjury Time warner may pay 750m fine Tyco execs charged { September 13 2002 } Xerox admits fraud Files Listed: 43

Correction/submissions

CIA FOIA Archive

National Security Archives

This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information, go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purpose of your own that go beyond 'fair use', you must obtain permission from the copyright owner.