Commentaries

Now raising intellectual capital

Go away Hank

The Securities and Exchange Commission’s settlement with Hank Greenberg over allegations that he permitted the use of accounting tricks to manipulate earnings at American International Group comes way too late.

Oh sure, it’s great the SEC managed to squeeze $15 million out of Greenberg before agreeing to settle the more then four-year-old civil investigation. But if the SEC really had the goods on Greenberg, it should have gone after him years ago–settlement or not.

If the SEC had brought an enforcement action against the former AIG chieftain last summer, it might have saved us from watching Greenberg make frequent appearances on CNBC to  regularly boast about his skills as a risk manager. For months now, Greenberg has been going on CNBC to claim the giant insurer never would have gotten into so much trouble, if he was still running the show.

In Greenberg’s world, if it wasn’t for former New York Attorney General Eliot Spitzer driving him out of AIG in 2005, the big government bailout of the insurer never would have happened. Why? Well, according to Greenberg, he would have stopped AIG Financial Products from writing those reckless credit default swaps on tens of billions of dollars of now worthless CDOs.

  •