NY sues AIG for accounting improprieties

NEW YORK, May 27 (UPI) -- New York has filed a civil fraud suit against American International Group Inc., accusing it of deceptively manipulating the company's books.

The suit, which also names two executives, says the insurance giant fraudulently doctored its accounting to trick investors and regulators and inflate the company's stock price, the Washington Post reported Friday.

Besides AIG, the suit names former chief executive Maurice Greenberg and former chief financial officer Howard I. Smith.

Greenberg closely tracked AIG's daily stock fluctuations and repeatedly phoned company traders to tell them to buy it to prop it up. On Feb. 18, for example, after AIG received a subpoena from New York officials, Greenberg called AIG's trading desk from his private jet, the suit says. "I want you to be a little more aggressive," he said at one point, the New York complaint says.

Both Greenberg and Smith vowed to fight the complaint.

Greenberg's calls to AIG traders are also the subject of state and federal investigations, and the Securities and Exchange Commission is continuing its investigation of the company.

AIG is the world's biggest publicly traded seller of property-casualty insurance to companies and the biggest U.S. life insurer.