On my way out the door to College Station, I note that the Lord of Regulation simply cannot stay out of the news.
After publicly flogging former American International Group, Inc. CEO Maurice “Hank” Greenberg for months (note earlier posts here and here), New York Attorney General Eliot Spitzer has decided not to pursue criminal charges against Mr. Greenberg in his probe of the giant insurer’s structured finance transactions, according to this Wall Street Journal ($) article. The WSJ reports that Spitzer has decided to focus on the civil-fraud allegations that he has already filed against Greenberg and AIG and leave any possible criminal fraud charges against Greenberg to federal prosecutors, who currently have ongoing criminal investigations over AIG in New York and D.C. Here is a Reuters article on the WSJ piece, and here are previous posts chronicling Spitzer’s investigation into AIG and Greenberg.
The Aspiring Governor Spitzer certainly has been charitable to his subjects involved in his criminal investigations recently. Over the past several weeks, he has announced his decision not to re-try William Sihpol and dropped criminal charges against another executive in connection with his investigation into mutual-fund trading. Spitzer’s decision not to prosecute Greenberg comes after public comments that led most folks to the conclusion that Spitzer had already decided to pursue criminal charges. Oh well, Spitzer should be complimented for finally making the right decision not to criminalize Greenberg’s business calls — if only Arthur Andersen had been so lucky.
In the meantime, AIG shares — which lost about a third of their value during Spitzer’s reign of terror against the company and Greenberg earlier this year — have rebounded over the past several months. The shares currently trade at about 90% of their value as of the time that Spitzer took aim at AIG and Greenberg despite the company’s lagging financial performance since Greenberg’s departure as CEO. That raises the interesting question of just who does Spitzer think he is protecting in continuing to pursue his civil litigation against AIG and Greenberg?