Greenberg Cancels Share Transfer
Former American International Group chief executive Maurice R. "Hank" Greenberg will reverse a transaction that transferred his fortune in AIG shares to his wife days before accounting probes forced him to resign. The stock was valued at $2.9 billion at the time. Greenberg, 80, and his wife, Corinne, will both own the 41.1 million shares once the transfer is canceled, his lawyers said.
Ohio pension funds that are suing Greenberg for securities fraud last month asked a judge to appoint a receiver to take control of the shares, saying they were concerned that the transfer might be an attempt to shield the Greenbergs' wealth.
AIG Profit Up 44 Percent
American International Group, reporting its first results since an earnings restatement reduced its net worth by $2.3 billion, said quarterly profit jumped 44 percent, to $3.68 billion. The world's largest insurer said in a statement that revenue for the first three months ended March 31 rose 16 percent, to $27.11 billion.
Reciprocal Executives Sentenced
A federal judge sentenced two former executives of Reciprocal of America to lengthy prison terms for their role in the 2002 collapse of the Richmond malpractice insurer under a plea agreement in which the defendants agreed to cooperate in an ongoing criminal investigation of the U.S. insurance industry.
Former president Kenneth R. Patterson was sentenced to 121/2 years for conspiracy to commit insurance fraud and two counts of mail fraud. Carolyn Hudgins, former executive vice president, was sentenced to five years for conspiracy to commit insurance fraud.
Answers Sought in Data Exposure
The attorneys general of 44 states demanded that the credit card processor responsible for a breach that exposed 40 million cardholders to possible fraud inform affected consumers about the risk. Officials have called it one of the largest security breaches involving consumer data.
In a terse letter sent to Atlanta-based CardSystems Solutions Inc., the law enforcement officials said the company needs to tell exactly what happened when a computer hacker may have gained access to millions of credit card numbers.
Congress Approves Junk Fax Bill
Congress approved legislation that allows companies to send unsolicited faxes to firms with which they have established relationships, reinstating a 1992 Federal Communications Commission ruling. It would eliminate an FCC rule that required written approval before sending unsolicited faxes.
Under the bill, those sending faxes must alert recipients of their right to opt out of future faxes and must abide by such requests. The measure is headed to President Bush's desk for his signature.
Key Enron Executive Testifies
The highest-profile executive among five former Enron Corp. broadband chiefs on trial testified that he did not lie to Wall Street about capabilities of the company's Internet unit in 2000 despite internal documents that indicated the network and software were still undeveloped.
Joseph Hirko headed Enron's broadband unit in its early years and is among three of the five executives charged with lying to analysts to get rich from selling hype-inflated stock.
SEC Prepares Mutual Fund Vote
Securities and Exchange Commission Chairman William H. Donaldson is prepared to go ahead with a vote today on mutual fund governance. A federal appeals court on June 21 ordered the SEC to reconsider the rule requiring that 75 percent of mutual fund boards, including the chairman, be independent. Officials at the U.S. Chamber of Commerce, whose suit yielded the appeals court decision, pledged to continue their legal fight against the rule.
The commission will also vote on new guidelines that would allow companies to distribute written material, in addition to the prospectus, about securities for sale; eliminate the "quiet period"; and allow large companies to sell securities as soon as they register them with the agency.
UAL, United Airlines' parent company, reported a loss of $93 million in May that it attributed to higher fuel costs. UAL, which reports results monthly to federal bankruptcy court, has lost more than $1.4 billion through five months of 2005.
RCN of Princeton, N.J., which owns Washington cable provider Starpower, reported a $29.4 million first-quarter loss, compared with a loss of $4.9 million in the corresponding period a year ago. Revenue for the three months ended March 31 rose 16 percent, to $140.8 million.
Compiled from staff and news service reports.