Buffet Faces Questioning in AIG Flap
The nation's second wealthiest man, billionaire investor Warren Buffet, has indicated he will cooperate in the investigation into a deal made by one of his companies, but claims he was never briefed on the details of the deal, according to his company Berkshire Hathaway Inc.
Executives of both Berkshire Hathaway and its insurance arm, General Reinsurance, have "voluntarily given interviews" with investigating authorities, and Buffett himself will do so "shortly," the company's statement said.
Berkshire Hathaway has denied published reports that Buffet may have been heavily involved in a 2000 deal that investigators suspect may have improperly boosted the financial position of American International Group (AIG), which is facing a number of investigations.
"Mr. Buffett was not briefed on how the transactions were to be structured or on any improper use or purpose of the transactions," Berkshire said in the statement.
AIG has let it's longtime chairman and chief executive Maurice "Hank" Greenberg go because of the investigation. Greenberg, 79, joined the company in 1960 and became chairman eight years later when the company's founder C.V. Starr died.
Since Greenberg, 79, was ousted as chief executive March 14, federal investigators have issued subpoenas for a dozen AIG executives and have uncovered 10 financial transactions that warrant greater scrutiny, a source told The Associated Press Monday, confirming an earlier report in the Journal.
He will step down as chairman this week and will meet on April 12 with investigators who have subpoenaed him. The Securities and Exchange Commission and New York State Attorney General Eliot Spitzer are both expanding their probes into irregularities at AIG, MSNBC reported.
AIG has fired three executives - including Chief Financial Officer Howard I. Smith - for not cooperating with investigators, and it remains unclear how much Greenberg will say as part of the probes, MSNBC reported.
In a statement e-mailed to reporters late Monday, Spitzer praised AIG board's for making “difficult decisions.”
“While there is a long way to go before this investigation is complete, the wise actions of the AIG board will help set this investigation on a path toward resolution,” Spitzer said. “I commend the AIG board for acting in a way that sets it apart from other boards that have faced similar problems in recent years.”
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.