Corporations and securities brief ~ AIG fires execs for not cooperating with probe
Amit Patel at 11:30 AM ET
[JURIST]Leading Tuesday's corporations and securities law news, the Wall Street Journal is reporting [subscription req'd] American International Group Inc. (AIG) [corporate website] has fired CFO Howard I. Smith and a vice president Christian M. Milton after the executives indicated they would invoke the Fifth Amendment [text] with regulators over the probe AIG manipulated its books. Both Smith and Milton were allegedly involved in the transaction involving General Re Corp. [corporate website] which is under scrutiny by regulators. The probe by New York Attorney General Eliot Spitzer [official website], the SEC and federal prosecutors involves a complex reinsurance deal, which may have been used to manipulate AIG's books. In late 2000 and early 2001, AIG reportedly booked $500 million in premium revenue from General Re and followed by adding $500 million in reserves to its balance sheet. AP has more.
In other news...
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- UK Home Secretary Charles Clarke [official website] was given more time by a court in London to consider a US request to extradite three former bankers of Royal Bank of Scotland Group Plc's Greenwich NatWest unit [corporate website] to stand trial on charges they used an Enron [corporate website; JURIST Hot Topic news archive] off- the-books partnership to defraud Royal Bank of $7.3 million. A UK court had ruled in October that the three bankers could be extradited but the bankers claim they should be tried in the UK, asking for a separate judicial review in their case. This is the third delay Secretary Clarke has received. Read the indictment against the three bankers [PDF]. Bloomberg has more and the Houston Chronicle has continuing coverage of the Enron trials.
- The National Association of Securities Dealers (NASD) [corporate website] announced it has fined Spear Leeds & Kellogg, recently acquired by Goldman Sachs Execution & Clearing [corporate website], $1 million for concealing sales of IPOs from the Depository Trust Corp. Spear Leeds did not deny or admit any responsibility. Read the NASD press release. AFX has more.
- Delphi Corp. [corporate website], the world's largest auto supplier, announced it has completed an internal probe into accounting errors at the company. Delphi has stated that it overstated its cash flow by $200 million in 2000 and overstated its pretax income by $61 million in 2001. The full results of the probe will be reported when the company restates its earnings which will be done by June 30. Read the Delphi press release. AP has more.
- GE Capital unit announced it has withdrawn a $2 billion loan facility for General Motors (GM) [corporate website] and its suppliers. GM will now have to provide its own early payment service to its suppliers. Reuters has more.
- Oracle Corp. [corporate website] won its bid to buy retail software maker Retek Inc. [corporate website] for about $670 million. Oracle beat out German rival SAP AG [corporate website] for Retek. Read the Oracle press release and the Retek press release. AP has more.
- IBM [corporate website] and Compuware Corp. [corporate website] announced they have settled the lawsuit brought by Compuware which accused IBM of predatory pricing and antitrust violations. Under the settlement, IBM will license $140 million of Compuware software over the next four years and will offer to buy $260 million of Compuware services over the same period. Read the Compuware press release. Read the IBM press release. Reuters has more.
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