AIG’s Company Flu By Robert Warne - February 21, 2002
A triple witching for American International Group (AIG) has worried shareholders of the world’s largest insurer by market value.
Stocks fell Feb 21 as news surfaced regarding a Securities and Exchange Commission probe into AIG’s books. The information requested by the SEC relates to AIG’s structured financial deals it made for a bank. Questionable bookkeeping has given many investors the Enron jitters recently.
Another factor impacting investors’ perception of the company is who will eventually replace Chariman Maurice Greenberg? Questions about Greenberg’s health have been raised after Greenberg missed an insurance conference in Bermuda and another meeting with investors due to the flu. Missing a meeting with investors is abnormal, for a man who was always where he had to be, when he had to be there, said Michael Paisan an analyst at Williams Capitol Group, according to Reuters.
And finally investors can’t be happy with statements made by Thomas Tizzio, AIG’s senior vice chairman. Tizzio, Greenberg’s replacement keynote speaker at the Bermuda conference, said there could be possible losses in the future for the company. These losses would stem from a rising number of shareholder lawsuits.
Shareholder lawsuits are covered by “director and officer” insurance policies underwritten by AIG. The policies cover everything from legal fees to awards granted to shareholders. The potential losses are attributed to the increasing number of corporate bankruptcies and accounting investigations.
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