The Securities and Exchange Commission yesterday secured a court order that bars American International Group Inc. and its former leader from tampering with documents that might be sought in an investigation of the company's accounting practices.
The court order, filed yesterday in U.S. District Court in Manhattan, prohibits the insurance giant and former chairman Maurice R. "Hank" Greenberg from "destroying, altering, concealing, secreting, or otherwise interfering" with the investigation. The order also covers C.V. Starr & Co., a private company headed by Greenberg that does business with AIG and has funneled compensation to AIG executives.
"This order will ensure the security and integrity of documents is preserved and that relevant evidence will be available in our ongoing investigation," said Mark K. Schonfeld, director of the SEC's Northeast Regional Office in New York.
The order came days after news reports of disagreements between lawyers for AIG and Greenberg over documents held at a Bermuda subsidiary. The company's new chief executive, Martin J. Sullivan, dispatched armed guards to watch the papers after hearing that some boxes were being carted away, the company has said.
AIG announced March 30 that it could reduce its net worth by $1.7 billion because of improper accounting maneuvers, including transactions with Caribbean units and a 2000-2001 deal with General Re Corp., a subsidiary of Berkshire Hathaway Inc. That $500 million deal was not handled properly on AIG's books because it did not involve the transfer of risk, the company acknowledged. Thus, it should have been treated as a loan instead of being used to increase AIG insurance reserves when investors were asking questions about their sufficiency.
AIG's stock price has fallen 26 percent since the company disclosed in February that it had received subpoenas from New York Attorney General Eliot L. Spitzer and the SEC. This week, Spitzer, who is investigating AIG alongside securities regulators and the Justice Department, issued a statement praising the company's cooperation and suggesting that a criminal prosecution of the company is unlikely.
Government lawyers continue to probe the activities of peopleinvolved in the case. Berkshire Hathaway chief executive Warren E. Buffett, a longtime Washington Post Co. board member who is considered a witness in the AIG matter, will provide information to regulators on Monday. Greenberg, who stepped down last month as chairman under pressure from regulators and board members, is scheduled to appear at an interview with regulators Tuesday.
SEC officials said Greenberg, AIG and C.V. Starr consented to yesterday's document preservation order. The court filing included a procedure for copying and transporting documents from overseas units to the United States for review by investigators.
Spokesmen for Greenberg, AIG and C.V. Starr did not return calls yesterday.