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Matching entries from Houston's Clear Thinkers
Landing the tuna rather than the barracuda
As noted here last month, Berkshire Hathaway chairman and mainstream media folk hero Warren Buffett is a key player and, as these NY Times and W$J articles report, perhaps even a key witness in the upcoming criminal trial of a...
The Buffett Rule
It's not every day that the NY Times editorial page heaps praise on a businessman, so my eyebrow raised a bit when I read this editorial yesterday elevating Berkshire Hathaway chairman Warren Buffett to folk hero status. But it wasn't...
Shoe drops on former AIG and General Re execs
Almost lost amidst the publicity over the first day of testimony in the Enron-related Lay-Skilling trial was the news that a Virginia federal grand jury had issued indictments against former General Re Chief Executive Ronald Ferguson, former General Re Chief...
"You're fired, but you better keep selling our products"
Let's get this straight. Last year, American International Group's board effectively canned its chairman and CEO, Maurice "Hank" Greenberg -- the man responsible for building the company into an insurance industry behemoth over the past generation -- in order to...
Oops!
You know it's been a bad day at the office when a typo costs your company over 27 billion yen, which equates to a cool $225 million. Here's what happened. A Mizuho Securities trader (ex-trader?) wanted to sell one (1)...
Former General Re CEO receives a Wells notice
Following on earlier plea bargains, former General Reinsurance Corp. CEO Ronald Ferguson received a Wells notice from the Securities and Exchange Commission late last week in regard to the SEC's investigation into various "finite risk" structured finance transactions between General...
Is Berkshire becoming a target?
This NY Times article reports that Berkshire Hathaway Inc. has disclosed that government authorities are probing at least one of the company's insurance subsidiaries other than General Reinsurance Corp. over accounting of "finite risk" reinsurance transactions. Here are the previous...
The Greenberg White Paper
This post from awhile back noted that former AIG chairman and Spitzer target Maurice "Hank" Greenberg and his legal team are preparing a "white paper" defending Mr. Spitzer's charges of bad accounting at AIG. Here are the previous posts on...
More Spitzer mischief
When one door for a misguided investigation closes for Aspiring Governor Eliot Spitzer, he just opens another one. Although misdirected, no one can say that Mr. Spitzer is not persistent. On Thursday, U.S. District Judge Sidney Stein of the Southern...
The illusory attorney-client privilege
In this timely post, White Collar Crime Prof Peter Henning notes a recent Fourth Circuit decision that bears on an increasingly knotty issue in this post-Enron era of criminalizing business -- that is, an employee's waiver of the attorney-client privilege...
The Lord of Regulation's turf wars
As noted in earlier posts here and here, New York attorney general Eliot Spitzer does not take kindly to other governmental agencies infringing on his various crusades to demonize wealthy business interests in his seemingly unending quest to promote his...
Hank fights back
With the criminal investigation of American Insurance Group, Inc. and Berkshire Hathaway unit General Re heating up earlier this week, former AIG chairman and CEO Maurice "Hank" Greenberg made his first detailed public comments regarding the propaganda campaign that New...
The high price of cooperation
Berkshire Hathaway's decision to roll over and provide government investigators anything they want in connection with the multiple investigations into the transactions between Berkshire General Reinsurance Corp. and American International Group, Inc. is starting to look like a very costly...
Does Hank Greenberg read Clear Thinkers?
This post from last week made the following comment about the "finite risk" insurance transaction that is at the center of Eliot Spitzer's investigation of AIG and Berkshire Hathaway unit General Re, and AIG's former chairman and CEO, Maurice "Hank"...
Criminalizing risk taking
Two columns in today's Wall Street Journal address one of the too little-discussed effects of this post-Enron era's criminalization of business -- that is, the chilling of beneficial risk-taking. In his weekly WSJ ($) column, Alan Murray examines the motives...
The increasing criminalization of business
This Wall Street Journal ($) article examines the increasing criminalization of business in the post-Enron era, which has been a frequent topic on this blog. Although the article does a reasonably good job of summarizing the troubling trend, it comes...
Is the NY Times really reading this blog?
I speculated facetiously awhile back that some NY Times editors are reading this blog. Now, I'm really starting to wonder. First, over the weekend, the NY Times ran this less than flattering article on the Lord of Regulation's recent defeat...
General Re continues to serve up sacrificial lambs
As predicted in this earlier post, this NY Times article reports on the guilty plea of Richard Napier -- a senior vice president at General Re in 2000 and 2001 when the questionable transaction with American International Group occurred --...
Former Gen Re exec fingers others
As anticipated in this post from earlier this week, John Houldsworth, a former high-level executive of the Cologne Re Dublin unit of Berkshire Hathaway Inc.'s General Reinsurance Corp., implicated four other senior General Re executives while pleading guilty on Thursday...
The Lord of Regulation comments on the Anderson decision
In an interview yesterday with Wall Street Journal columnist Alan Murray, New York AG ("Attorney General" or "Aspiring Governor," take your pick) Eliot Spitzer observed that he agreed with the recent Supreme Court decision in Arthur Andersen LLP v. United...
The noose tightens -- General Re exec cops plea
John Houldsworth, an executive at Berkshire Hathaway Inc.'s General Reinsurance Corp. unit, has agreed to plead guilty to a charge of criminal conspiracy in connection with the company's nontraditional insurance finance transactions with American International Group Inc. Although Mr. Houldsworth...
More on AIG's Enronesque experience
American International Group Inc. released its long-delayed annual report yesterday and, as expected, reported a 2.7% hit to the company's net worth along with cautionary notes about the longer-term cost that AIG is confronting as it deals with multiple governmental...
Andersen wins at the Supreme Court
In a unanimous decision, the Supreme Court overturned the conviction of the defunct Arthur Andersen accounting firm for destroying documents relating to its client, Enron Corp., before Enron collapsed into chapter 11 bankruptcy in late 2001. Here are the previous...
The Lord sues AIG and Greenberg
New York AG ("Attorney General" or "Aspiring Governor," take your pick) Eliot Spitzer and the New York State Insurance Department filed a civil lawsuit today against American International Group, Inc and its two former top executives -- former CEO Maurice...
The Chronicle makes a point about DeLay that it failed to make about Enron
A good, old-fashioned snit between Texas political opponents gave the Houston Chronicle an opportunity this week to make a good point about the rule of law and the integrity of governmental investigations. But in so doing, the Chronicle highlighted its...
First AIG exec cops immunity deal
Joseph H. Umansky, president of AIG Reinsurance Advisors over the past 13 years, became the first senior executive at American International Group Inc. to strike a deal with authorities to offer his testimony in return for immunity from potential charges...
The Oracle's sacrificial lamb?
Berkshire Hathaway used the tried-and-true tactic of a late Friday afternoon news release in an attempt to generate the least amount of notice possible for its most recent quarterly earnings report. However, in doing so, Berkshire raised eyebrows by disclosing...
It's a tough time to be an insurer
Frustrated with the Lord of Regulation getting all the headlines recently, the Federal Bureau of Investigation announced yesterday a wide-ranging inquiry into the insurance industry that could extend into banking and other financial sectors. FBI investigators and insurance regulators from...
Daily negative AIG report
Following on Friday's negative report, American International Group Inc. announced late Sunday that it would restate more than four years of financial statements and reduce its net worth by $2.7 billion, which is about 3.3% of AIG's net worth. Although...
It continues to get worse for AIG
Following on this progression of damaging public disclosures over the past several months, American International Group Inc. announced yesterday, as this NY Times article reports, that the company has decided to delay for a third time the publication of its...
AIG is sounding more like Enron all the time
As noted earlier here and here, there are several characteristics of the structure of American International Group Inc. that are similar to the structure of Enron Corp. In particular, both companies' business is largely dependent on its customers' trust and,...
AIG's Enronesque experience continues
As noted in this previous post, the reason that Enron crashed was that its business model required that its customers rely on the company's financial integrity and not necessarily on the company's net worth. Accordingly, when Enron's financial integrity came...
For goodness sakes, get on with it
Don't miss this Wall Street Journal ($) editorial today, which addresses the same issue that many of these earlier posts address in regard to the Lord of Regulation's ongoing public flogging of American International Group, Inc. and its former chairman...
The Lord of Regulation chats with the Oracle of Omaha
Let's review the landscape of regulating business for a moment. Various former executives of disgraced and insolvent Enron Corp. are under indictment for using structured finance transactions that independent lawyers and accountants approved to mislead investors regarding Enron's true financial...
You don't say?
Eliot Spitzer, the New York AG (i.e., "Aspiring Governor") made the Sunday talk show circuit yesterday in regard to his campaign against corporate wrongdoing generally and his ongoing investigation of transactions between AIG and a unit of Berkshire Hathaway (earlier...
Did Buffett rat out AIG?
In an extraordinary development in the unfolding criminal investigation of transactions between American International General, Inc. and Berkshire-Hathaway, Inc., this NY Times article reports that Berkshire chairman Warren Buffett -- in an effort to win leniency for Berkshire in an...
Enron-AIG-Berkshire: Regulating earnings management
Don't miss Wall Street Journal ($) columnist Holman Jenkins' Business World piece today. In analyzing the Lord of Regulation's assault on American International Group, Inc. and its long history of being rewarded by the market for its adroit management of...
The Lord of Regulation moves the market
In an effort to calm the harried investors in his latest target, American International Group Inc., New York AG ("Aspiring Governor") the reigning Lord of Regulation Eliot Spitzer announced yesterday that his office expects to reach a civil settlement with...
Is PriceWaterhouseCoopers next?
American International Group Inc.'s public admission this week that it engaged in improper accounting practices has placed AIG's auditor -- PricewaterhouseCoopers LLP -- squarely in the sights of government regulators and plaintiffs' lawyers. Here are the earlier posts on the...
Absolutely Enronesque
In the most stunning in a series of revelations that has rocked the U.S. business community, American International Group Inc. admitted yesterday to numerous and substantial accounting irregularities that could reduce its net worth by over $1.75 billion. Moreover, the...
The Lord of Regulation goes after the Oracle of Omaha
Almost on cue, this Wall Street Journal article($) is reporting that Warren Buffett, the famed investor who is chairman and CEO of Berkshire Hathaway Inc., will be questioned by regulators next month over his involvement in the transaction between Berkshire's...
The headhunter business of the Lord of Regulation
This Corporate Counsel article reports on the cottage industry in placement services that New York AG ("Aspiring Governor") Eliot Spitzer has developed in regard to his multiple investigations of big insurance companies. Seems as though a number of those companies...
But what about this issue?
The NY Times Gretchen Morgenson provides this lucid analysis of the deal that prompted American International Group's board to call upon Maurice "Hank" Greenberg to step down as AIG's CEO after a generation of phenomenal wealth building for AIG shareholders....
The Lord of Regulation demands even more from AIG
In what is becoming a typical development in such sagas, this NY Times article reports that the board of financial services giant American International Group Inc. is considering a move to restate its financial statments as a result of suspected...
AIG sacrifices more to the Lord of Regulation
Following on these earlier posts regarding the increasing threat of criminal indictment that is being place on American International Group executives, AIG canned two of its top executives -- CFO Howard I. Smith and VP Christian M. Milton -- after...
Meanwhile, over at AIG and Berkshire . . .
And while the business and legal worlds focus on the implications of the Ebbers conviction, this NY Times article reports on the uneasiness at Berkshire Hathaway as New York Attorney General Eliot Spitzer carves another notch in his anti-business...
CEO news
After a couple of years of shareholder unrest over the direction of the Walt Disney Co., the company's board yesterday named veteran Disney insider Robert Iger to replace Michael Eisner as the company's CEO. Mr. Iger was Mr. Eisner's choice...
Feds bear down on Berkshire
On the heels of Warren Buffett's annual letter to Berkshire Hathaway shareholders that was silent on such matters, federal and state investigators are focusing on whether a four year old transaction between Berkshire Hathaway's General Reinsurance Corp. and American International...
Spitzer takes dead aim at AIG
New York AG (meaning either "attorney general" or "aspiring governor") Eliot Spitzer and the Securities and Exchange Commission issued subpoenas yesterday to American International Group Inc. in connection with investigations into AIG's earnings management techniques relating to certain types of...
Warren Buffett, meet Eliot Spitzer
General Re Corp., the wholly-owned insurance subsidiary of Warren Buffett's Berkshire Hathaway Inc., has been receiving some interesting mail lately. Berkshire issued a press release on last week (see Form 8-K announcement here) disclosing that the insurer had received subpoenas...
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