New York Attorney General Eliot Spitzer has filed lawsuits against both American International Group and its former chief, Maurice Greenberg, accusing them of deceitful practices regarding AIG's financial accounts.

The world’s largest insurance company and its former chief executive will now go before a US court for the first time since Spitzer and his associates in the New York Insurance department and SEC initiated investigations into the US insurance industry late last year.

According to reports from the FT, AIG and Greenberg will face accusations from Spitzer that include routinely engaging in misleading accounting and financial reporting and engaging in numerous fraudulent transactions.

Spitzer believes that the international insurance titan and a number of its senior staff were involved in activities that artificially inflated company finances, while also hiding problems through accounting techniques in order to support the company’s share price.

Ironically, now that the alleged illegal practices that were instigated to shore up AIG’s share price have been revealed, the company has seen a quarter of its stock value disappear.