The world's largest insurer AIG may settle charges of improper accounting brought by the New York attorney general for $1.5 billion, according to reports in The Wall Street Journal.
The settlement would follow almost a year of investigations into the company, which was accused of using accounting tricks to hide losses. The former chairman of AIG, Maurice Hank Greenberg, who lost his position over the scandal, said that the fine was disproportionate.
Shareholders lose when companies choose to settle investigations motivated by political ambition, fuelled by threats and settled out of fear, said the former chairman. Although a settlement would end the lawsuit against AIG, the authorities may still bring charges against Maurice Greenberg and the former chief financial officer Howard Smith, The Wall Street Journal said.
Analysts believe that settling for $1 billion would represent about 25 cents an AIG share after taxes, almost equaling the $1.57 billion losses sustained from the US hurricanes last year.