Legal News

SEC Sends Greenberg Its Calling Card

By Dan Slater

Judge Christopher Droney certainly never wrote, “The SEC should pursue Hank Greenberg.” But when Judge Droney, who presided over the AIG trial, issued a recent decision saying the government had presented “sufficient evidence” for a jury to conclude that the AIG conspiracy started with a phone call by former CEO Greenberg — an unindicted co-conspirator — he seemed to be flashing a big green light.

Today, the WSJ’s Amir Efrati and Liam Pleven are reporting that the SEC has sent Greenberg, 83, a so-called Wells notice, indicating that he may face civil charges for his alleged role in an effort to improperly boost AIG’s financials through fraudulent transactions with GenRe.

The Wells notice, sent to Greenberg (pictured) on Friday, delivers the strongest message yet that the feds may take action, writes the WSJ. (What’s a Wells notice? According to the report, it means the SEC may seek approval from its commissioners to bring an enforcement action. But the recipient can submit responses in an effort to persuade the agency not to pursue the proposed charges.)

Greenberg’s lawyer, Robert Morvillo, said in a statement Tuesday that the Wells notice “is a step in the process….We remain confident of our position on the merits, and we believe that none of the remaining issues are material to AIG’s financial statements. When the commission has had the opportunity to consider all the facts, we believe that they will agree.” A spokesman for the SEC declined to comment.

Photo: Associated Press

Full post as published by Law Blog - WSJ.com on May 21, 2008 (boomark / email).