AIG sues ex-chief, CFO

American International Group Inc. yesterday sued ex-chairman Maurice R. Greenberg and former CFO Howard I. Smith for more than $1 billion in damages, published reports said. The insurance company is taking over a suit originally filed by AIG shareholders. Initially, court actions started in 2004 after Eliot Spitzer, then New York attorney general, accused the company and Mr. Greenberg of manipulating earnings and participating in sham reinsurance transactions, Reuters said. As a result, Mr. Greenberg left his post in 2005, according to the Associated Press. Mr. Spitzer, now governor of New York, has since dropped some of the charges. AIG’s suit, which was filed with the Delaware Court of Chancery, alleges that Messrs. Greenberg and Smith caused the company “to be exposed to liability for violations of the federal securities laws and potential criminal liability,” Reuters said. AIG’s damages include the costs of an internal investigation, an $800 million settlement for a civil action with the Securities and Exchange Commission, a $25 million payment to the U.S. Department of Justice, a $100 million fine to New York’s Attorney General and Insurance Department, plus hundreds of millions in penalties and interest to settle claims that the company underpaid its workers’ compensation taxes and contributions, the AP said.