Log In

Reset Password

AIG and Gen Re executives to face retrial

Four former GenRe executives and one former executive from AIG will face trial next year on accusations they created a sham reinsurance transaction to boost AIG’s earnings.

This is the second time the executives have faced trial on federal fraud charges.

General Reinsurance Corp, an insurer owned by Warren Buffett’s Berkshire Hathaway Inc, had won a dismissal of a lawsuit accusing it of helping former American International Group Inc. (AIG) defraud investors, but a federal judge in the US has ordered a retrial.

The five are accused of engineering a sham reinsurance transaction called a loss-portfolio transfer. Prosecutors say GenRe allowed AIG inflate its loss reserves to $500 million without assuming any risk. GenRe allegedly paid a $10 million premium that AIG secretly returned through a side deal, plus an additional $5 million fee.

The executives were previously convicted in 2008 and sentenced to prison, but the 2nd US Circuit Court of Appeals overturned their convictions last year and ordered a new trial citing errors made by the judge in the original trial.

The retrial is set to begin in US District Court of Connecticut on January 22, 2013.

Back to court: An AIG executive and four others from GenRe face retrail on federal fraud charges. (AP Photo/Mark Lennihan)

You must be Registered or to post comment or to vote.

Published March 02, 2012 at 1:00 am (Updated March 02, 2012 at 8:10 am)

AIG and Gen Re executives to face retrial

What you
Need to
1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
7. To report breaches of the Terms of Service use the flag icon