San Francisco Seeks To Recover Losses From AIG
By Associated Press - May 20, 2005SAN FRANCISCO (Dow Jones/AP) _ The City Attorney of San Francisco sued American International Group Inc. for alleged securities fraud, and seeks to recover losses incurred by the city employees' retirement system.
The purported class action also names Berkshire Hathaway Inc.'s General Re Corp. unit, which has been linked to AIG's recent accounting troubles.
Representatives from AIG and General Re weren't immediately available to comment on the lawsuit.
In a news release Monday, the Office of City Attorney Dennis Herrera said the complaint alleges that insurer AIG illegally inflated the company's stock price with egregious business malfeasance and violations of federal securities laws.
Herrera filed the complaint in the U.S. District Court for the Southern District of New York on behalf of San Francisco's employees' retirement system, which acquired AIG shares between Oct. 1, 1999 and March 30.
AIG is under various government probes for allegedly using improper accounting to boost financial results. The company recently said its ongoing accounting review would result in $2.7 billion in restatements.
The Securities and Exchange Commission, as well as New York Attorney General Eliot Spitzer are looking through AIG's books. Chairman, Chief Executive and President Maurice ``Hank'' Greenberg retired in March amid the investigation, which also led to the dismissal of Chief Financial Officer Howard Smith for failure to cooperate with the government inquiries.
Meanwhile, regulators are also investigating a transaction between General Re and AIG that boosted AIG's premiums and reserves by $500 million each. AIG has said it improperly accounted for that transaction. | 
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