Corporations and securities brief ~ Warren Buffett set to testify in AIG probe News
Corporations and securities brief ~ Warren Buffett set to testify in AIG probe

[JURIST] Leading Monday's corporations and securities law news, Warren Buffett [Wikipedia profile] is set to appear before the SEC, New York Attorney General Eliot Spitzer [official website] and the US Department of Justice [official website] to answer questions related to the investigation of insurance giant American International Group (AIG) [corporate website]. The questions will focus on reinsurance company General Re [corporate website], a subsidiary of Buffett's Berkshire Hathaway. At issue in the investigation is reinsurance AIG purchased from General Re in late 2000 and early 2001 which investigators believe may have been used to bolster AIG's reserves artificially. AP has more. The investigation has already led to AIG chief executive Maurice "Hank" Greenberg's [Wikipedia profile] being ousted from the company. According to the Wall Street Journal article [subscription req'd], Buffett gave regulators a tip that implicated Greenberg in the allegedly illegal transaction. Greenberg is set to answer questions on Tuesday though speculation indicates he will invoke the Fifth Amendment and refuse to testify. Bloomberg has more.

In other news…

  • The SEC [official website] has started an informal investigation into Elan Corp. [corporate website] over trading of the pharmaceutical company's shares before the significant drop in its price. The drop in stock price is related to Elan's decision to withdraw the drug Tysabri [Elan press release], a mutiple sclerosis fighting drug which was linked to a potentially fatal disease of the central nervous system. AP has more.
  • The European Union said it will not file a formal complaint with the WTO [official website] over US subsidies to Boeing Co [corporate website]. The announcment comes after a 90-day negotiation period ended with no settlement related to subsidies given to airplane manufacturers Airbus [corporate website] and Boeing by the EU and US respectively. It is not clear what the next step will be between the negotiaters. CBSMarketWatch has more.
  • A Michigan judge has granted class action status to a lawsuit brought by 290 homeowners against Delphi Corp. [corporate website] over a leak of vinyl chloride at a Michigan plant which spread to the groundwater. The lawsuit has gone forward even as the EPA has ruled the tainted water to be too far underground to affect the homeowners' drinking water. CBSMarketWatch has more.
  • As previously reported on JURIST's Paper Chase, Microsoft Corp. [corporate website] will pay $150 million over four years to settle antitrust claims made by personal-computer company Gateway Inc [corporate website]. The settlement comes as a result of the US government antitrust suit against Microsoft during which a judge said Microsoft's dominance had hurt Gateway. Over the past year, Microsoft agreed to pay Burst.com Inc. $60 million [Microsoft press release] to settle a patent-infringement lawsuit and paid Sun Microsystems Inc. $1.6 billion [Microsoft press release]. Read the Microsoft press release. Bloomberg has more.
  • Verizon Communications Inc.'s [corporate website] deal to buy MCI Inc. [corporate website] has hit another snag as shareholders are angered by Verizon's agreement [Verizon press release] to buy Carlos Slim's 13% stake in MCI Inc. for more than it is offering other shareholders. Pressure is mounting on the MCI board to get a better deal from Verizon. Bloomberg has more.
  • Life assurer Equitable Life [corporate website] has launched a £4 billion claim in British High Court against former directors and auditors of the company. The suit claims Ernst & Young [corporate website] signed off on accounts which they knew to have problems. The company also wants nearly £2 billion from 15 former directors who they claim were negligent in their duties. Equitable Members Action Group has more information on the suit. BBC News has more.

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THIS DAY @ LAW

Laws of Burgos put into effect

The Spanish Crown put the Laws of Burgos into effect on December 27, 1512. These laws governed the relationship of Spanish settlers with the indigenous peoples of the Caribbean. The laws established the encomienda system of labor, promoted conversion to Catholicism, and safeguarded the indigenous peoples from physical abuse.  However, historians argue that the laws were ineffective at protecting the rights of the indigenous population. Learn more from the Library of Congress.

Prohibitionist Carrie Nation carried out her first public bar smashing

On December 27, 1900, militant Prohibitionist Carrie Nation carried out her first public smashing of a bar, at the Carey Hotel in Wichita, Kansas. Nation argued that destroying bars was an acceptable means of battling the liquor trade since the Kansas Constitution prohibited alcohol. Learn more about Carrie Nation.

World Bank created

On December 27, 1944, the World Bank was created during the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire, USA. Learn more about the history of the World Bank.