American International Group's former Chief Executive Hank Greenberg agreed to pay $15 million to settle regulators' allegations of improper accounting transactions, the Securities and Exchange Commission said Thursday.
Howard Smith, AIG's former chief financial officer, also agreed to pay $1.5 million to settle SEC charges relating to his and Greenberg's involvement in improper accounting transactions that inflated the insurer's financial results between 2000 and 2005, the SEC said.
Greenberg and Smith, who both left AIG (NYSE: AIG) in 2005 amid the accounting scandal, agreed to settle the charges without admitting or denying the SEC's findings.
According to the SEC, Greenberg and Smith were responsible for material misstatements that helped AIG falsely report financial results that consistently met or exceeded key earnings and growth targets.
Among other improper actions, the former executives engaged in a purported deal with an offshore shell entity to conceal multimillion dollar underwriting losses from AIG's auto- warranty insurance business, the SEC alleged.
Greenberg ran AIG for 38 years, building the company into the world's largest insurer. The company's board of directors forced him to resign after he refused to cooperate with an internal investigation into accounting practices.