Reply #51: Ex-AIG Exec Is Indicted

[UpInArms]

http://www.thestreet.com/_tscfoc/stocks/banking/10266144.html

A federal grand jury has indicted a former American International Group (AIG:NYSE - news - research - Cramer's Take) executive on charges arising from the accounting scandal that led to the forced resignation of Maurice Greenberg.

Christian Milton, AIG's former vice president for reinsurance, and three former General Re executives were charged with taking part in a fraudulent scheme to manipulate AIG's financial statements. The grand jury charged the defendants with securities fraud, conspiracy to commit securities fraud and causing false statements to be made to the Securities and Exchange Commission.

Milton is the first top AIG executive to be charged in the accounting scandal that led to a massive management shakeup at AIG.

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Authorities have alleged the Gen Re transaction began with a phone call from former AIG Chairman and CEO Maurice Greenberg to Ronald Ferguson, who was then Gen Re's president. The SEC complaint contends it was understood by Ferguson that AIG wouldn't assume any actual risk in the deal.

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