Former American International Group (AIG) [corporate website] CEO Maurice Greenberg on Friday agreed to settle [press release] accounting fraud charges, first brought by then New York Attorney General Eliot Spitzer in 2005. The current New York Attorney General Eric Schneiderman [official website] stated of the settlement:

Today’s agreement settles the indisputable fact that Mr. Greenberg has denied for twelve years: that Mr. Greenberg orchestrated two transactions that fundamentally misrepresented AIG’s finances. After over a decade of delays, deflections, and denials by Mr. Greenberg, we are pleased that Mr. Greenberg has finally admitted to his role in these fraudulent transactions and will personally pay $9 million to the State of New York.

Former AIG CFO Howard Smith has also agreed to pay [Reuters report] $900,000 as part of the settlement. Both men released statements to the press admitting their role in the matter. Specifically, Greenberg and Smith [press statements, text] both admitted that they signed off on the company’s financial statements filed with the SEC between 2000 and 2003 fully aware of the financial impact of the two sham reinsurance transactions (Capco and Gen Re) that the company entered into in 2000. The end result of these actions was the material misrepresentation of AIG’s loss reserves and misstatement of its underwriting results between 2000 and 2004. As part of the settlement, both men have also agreed to surrender the $9.9 million performance bonuses that they received during the 2001-2004 period. Schneiderman had also planned to ban [Reuters report] Greenberg and Smith from serving as officers and directors in public companies and the securities industry, but that plan has since been dropped.

AIG has been part of numerous lawsuits since the 2008 financial crisis [BBC backgrounder]. In June 2015 the US Court of Federal Claims [official website] ruled [JURIST report] that the Federal Reserve [official website] bailout of AIG in 2008 exceeded its authority but did not award any damages. The suit was brought by Greenberg and claimed that the Federal Reserve’s taking of a 79.9 percent equity share as consideration for bailout funds should be considered a taking without just compensation and an illegal exaction under the Fifth Amendment [Cornell LII backgrounder]. In March of the same year a judge for the US District Court for the Southern District of New York [official website] approved [JURIST report] a $970.5 million settlement between AIG and shareholders who said they were misled about the company’s subprime mortgage exposure. In April 2013 the same court approved [JURIST report] a $115 million settlement between AIG shareholders and the company’s former CEO and other executives in order to resolve allegations that the insurer misled investors about financial records. In September 2010 a class-action case moved forward against former AIG chief executive Martin Sullivan, former executive for AIG’s subsidiary Joseph Cassano and multiple other former chief and senior executives, among accusations of intent to fraudulently mislead the market [JURIST report] and failing to disclose to its shareholders the risks the company was taking in issuing sub-prime mortgages.