Former American International Group Inc. CEO Maurice “Hank” Greenberg found himself again trying to bat away one probing question after the next from the witness stand Thursday, facing a prosecutor’s questions about how he dealt with a colleague’s warning that AIG may face stepped up regulatory scrutiny after the 2001 Enron accounting scandal.
David Nachman, a senior enforcement lawyer for the New York Attorney General’s Office, zeroed in on a May 2002 memo issued to Greenberg by Joseph Umansky, then an AIG senior vice president. In the memo, Umansky allegedly warned Greenberg that the company might need to rethink a financial transaction—known as CAPCO—that was aimed at converting auto-warranty insurance underwriting losses into capital losses considered less harmful by investors.
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