Some Charges Dropped Against Former AIG Executives

New York Attorney General Eliot Spitzer has decided to drop some of the charges against two former executives of the insurance company AIG. Hank Greenberg and Howard Smith, the company's former chairman and chief financial officer, are accused of misleading investors about the size of the company's reserves.

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RENEE MONTAGNE, host:

The New York attorney general's office has decided to change some of the charges against two former executives at the insurance company American International Group, or AIG.

Former CEO Maurice Hank Greenberg, and former Chief Financial Officer Howard Smith, are accused of concocting a scheme to mislead investors about the size of the company's reserves. Greenberg's lawyers said the decision to amend the case amounted to a significant victory for their client.

NPR's Jim Zarroli reports.

JIM ZARROLI: Attorney General Eliot Spitzer said he has decided to drop some of the charges in the case against Greenberg and Smith. His office said it had dropped an allegation that AIG mislead insurance regulators, and also removed a claim concerning the underpayment of workers compensation claims.

The office has also dropped charges against AIG itself, something that was expected because AIG agreed to settle the case for $1.6 billion earlier this year.

Greenberg's attorney, David Boies, issued a press release saying the amended complaint removes the most explosive charges, and he said what remains of the case amounts to little more than an accounting dispute. Boies said he was confident the rest of the charges against his client would also be dismissed.

But Spitzer said such comments were absurd. It said the amendment was simply an attempt to streamline some aspects of the case, and it said the core of the charges against the two men remains unchanged. The amendment comes as Spitzer is running for governor.

Jim Zarroli, NPR News, New York.

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