Not much time for analysis but here is the news story. sop
HARTFORD, Conn. (AP) -- Five former insurance company executives were found guilty Monday of a scheme to manipulate the financial statements of the world's largest insurance company.
The verdict came following a monthlong trial in federal court.
The defendants, four former executives of General Re Corp. and a former executive of insurance industry leader American International Group Inc., sat stone-faced as the verdict was read.
They were accused of inflating AIG's reserves through reinsurance deals by $500 million in 2000 and 2001 to artificially boost its stock price.
Reinsurance policies are backups purchased by insurance companies to completely or partly insure the risk they have assumed for their customers.
The defendants were former General Re CEO Ronald Ferguson; former General Re Senior Vice President Christopher P. Garand; former General Re Chief Financial Officer Elizabeth Monrad; and Robert Graham, a General Re senior vice president and assistant general counsel from about 1986 through October 2005.
Also charged was Christian Milton, AIG's vice president of reinsurance from about April 1982 until March 2005.
Ferguson, Monrad, Milton and Graham each face up to 230 years in prison and a fine of up to $46 million. Garand faces up to 160 years in prison and a fine of up to $29.5 million.
"This is a very sad day, not only for Ron Ferguson, but for our criminal justice system," Clifford Schoenberg, Ferguson's personal attorney, said in a statement distributed at U.S. District Court in Hartford. "I and the rest of Ron's legal team will not rest until we see him -- and justice -- vindicated."
Monday, February 25, 2008
Breaking: Federal Jury Finds 5 Former Insurance Executives Guilty in Financial Manipulation Scheme
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2 comments:
Essentially they (General Re) were padding the reinsurance numbers of the parent company to make the numbers look better. Warren Buffet sold the "reinsurance" and some thought he would either testify, or be indicted.
Buffet later bought General Re. It was General Re he was referring to when he commented that derivatives were "financial weapons of mass destruction,"
as he tried to unwind their positions.
Warren Buffet is the interesting figure in this Russell. He was treated with kid gloves by the feds though he sits at the top of this entire mess. You may remember the corporate prosecution by the feds in Virginia was killed last year by the DoJ.
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