AIG Executives Canned For Failing to Cooperate With Investigators

March 22, 2005 ( - American International Group (AIG) has terminated the employment of two top executives for failing to cooperate with a regulatory probe.

According to reports from Reuters, Howard Smith – the chief investment officer until he took leave last week – and Christian Milton – a vice president of reinsurance – signaled they would invoke their right to silence, and have been fired.

The investigation by New York Attorney General Eliot Spitzer and the Securities and Exchange Commission (SEC) revolves around charges that the company manipulated its accounts to mislead investors. Both Spitzer and the SEC charge that in a reinsurance deal with Warren Buffet’s General Re Corp., financial statements may have been enhanced.

“Both executives were terminated pursuant to the company’s policy that requires its employees to cooperate with regulators on matters pertaining to the company,” an AIG spokesman told Reuters.

The two were not the first AIG executives to lose their job in the wake of the investigation, and AIG CEO Maurice Greenberg has resigned due to issues related to a General Re financing transaction (See Report: AIG’s Greenberg to Step Down ).

The company has already proposed a settlement with regulators over a case that it sold a financial product that might be used by companies to beef up their financial statements (See AIG Proposes Settlements in SEC, DOJ Probes ).