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

Insurance accounting fraud by buffett subsidiary Original Source Link: (May no longer be active)    http://quote.bloomberg.com/apps/news?pid=10000006&sid=ajrHy8W8kaLg&refer=home http://quote.bloomberg.com/apps/news?pid=10000006&sid=ajrHy8W8kaLg&refer=home SEC Probe of General Re May Target More Executives, Person Says May 10 (Bloomberg) -- The U.S. Securities and Exchange Commission will probably pursue lawsuits against more than one executive of Berkshire Hathaway Inc.'s General Re Corp. as it investigates reinsurance accounting, a person familiar with the probe said. The SEC on May 2 informed Richard Napier, a senior vice president at General Re's U.S. unit, that he may be sued by the agency for helping American International Group Inc. improperly use a reinsurance contract to boost its reserves for claims, the person said. Other current or former executives of General Re, the biggest U.S. reinsurer, are likely to receive so-called Wells notices, said the person, who declined to be identified. Regulators including the SEC are investigating whether executives of Stamford, Connecticut-based General Re aided clients such as AIG, the world's largest insurer, in misstating their financial reports with a type of reinsurance that can be used to smooth earnings. Berkshire, run by billionaire Warren Buffett, last month said Buffett had no knowledge AIG would use a transaction improperly. ``The SEC has been saying that it will bring actions against individuals who either directly violate the securities laws or cause others to violate them,'' said Michael Missal, a former SEC attorney who now practices law at Kirkpatrick & Lockhart Nicholson Graham LLP in Washington. ``It's clear they're really going after these cases now.'' General Re Chief Executive Joseph Brandon declined to comment, and Napier didn't return phone calls to his office. Berkshire, based in Omaha, Nebraska, disclosed the SEC's Wells notice on May 6, without identifying the executive as Napier. The person familiar with the investigation didn't specify whether the executives who may receive Wells notices still work at General Re. $2.7 Billion A Wells notice indicates the SEC has discovered potential infractions and gives the recipient a chance to reply before enforcement action is taken. SEC spokesman John Nester declined to comment. AIG admitted on March 30 to incorrectly booking a four-year- old transaction with General Re that increased AIG's reserves by $500 million. AIG's shares have fallen 25 percent since it disclosed subpoenas from the SEC and New York Attorney General Eliot Spitzer on Feb. 14. The probes forced Maurice ``Hank'' Greenberg, 80, to step down as chief executive in March and led AIG to admit improper accounting overstated its net worth by $2.7 billion. The shares of Berkshire, an investment and insurance company, have fallen 9.2 percent in the same time period. The company said on March 29 that Buffett doesn't talk regularly to General Re executives. Investigators for Spitzer, the SEC, and the Justice Department interviewed him on April 11, and Spitzer said at the time that he was a ``cooperating witness'' rather than a target of the investigation. Conference Call Napier participated in a November 2000 conference call in which General Re and AIG executives discussed the reinsurance contract, the Wall Street Journal reported last month, citing people familiar with the matter. Napier and Elizabeth Monrad, General Re's chief financial officer at the time, explained to AIG's senior vice president for reinsurance, Christian Milton, that the policy lacked sufficient risk to justify favorable insurance accounting, the Journal said. AIG executives said the lack of risk wasn't a concern, the paper said. Monrad and Milton's lawyer, Frederick Hafetz, didn't return phone calls. New York-based AIG fired Milton in March for failing to cooperate with regulatory investigations touched off by the General Re transaction. General Re entered into the AIG transaction through its Dublin-based business, which was also the focus of an Australian investigation of collapsed insurer HIH Insurance Ltd. Dublin In both instances, the contracts were a type of non- traditional policy that plays on the boundaries between insurance and financing. Investigators are concerned the policies can be abused to mask losses or smooth profit. The Irish Financial Services Regulatory Authority has asked General Re for information about its non-traditional policies, Berkshire said on May 6. In addition, the U.K.'s Financial Services Authority is investigating a current officer of General Re's London-based Faraday Group, as well as a former officer of Cologne Reinsurance Co. of Dublin. Berkshire didn't name the individuals. A phone call to Milan Vukelic, chief executive of Faraday, was directed to the company's legal department, which didn't return a message. Australian regulators last year banned Vukelic and six other current and former executives of General Re units from working in insurance because of their role in HIH's 2001 collapse. Vukelic appealed the decision and had it overturned in January. Two of the other executives, John Houldsworth and Tore Ellingsen, worked in Dublin at Cologne Re. Ellingsen left the company this year, said a Cologne Re assistant who answered the phone in Dublin yesterday. Houldsworth couldn't be reached for comment. Last Updated: May 10, 2005 00:05 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.