In recent months, Maurice “Hank” Greenberg has made no secret of his disdain for new corporate-governance rules and the authority of the Securities and Exchange Commission, Wall Street’s top cop, to enforce them.
Now it’s the SEC’s turn to fire back.
CNBC has learned that Greenberg has received a subpoena from the SEC last month and will be giving his first deposition as part of the SEC’s continuing investigation into what role, if any, Greenberg played in alleged accounting improprieties at his old firm, American International Group, which led to a $3.6 billion earnings restatement, a $1.6 billion settlement between AIG and a host of regulators, and Greenberg’s eventually being forced from his job as chairman and CEO.
The deposition will take place in the next week or so, say people with knowledge of the matter; Greenberg said he is planning to answer all questions and not assert his fifth amendment rights, these people say.
So far, Greenberg hasn’t been charged by the SEC, and he has steadfastly denied that he has done anything wrong. However, he does face civil charges initially filed by New York Attorney General Eliot Spitzer over allegations that he was behind the massive accounting irregularities at AIG that led to the restatement and the regulatory settlement.
Last year, Spitzer -- now New York's governor -- dropped several of the initial charges. The new attorney general, Andrew Cuomo, has said he is continuing to proceed with the case.
Still, the SEC subpoena could be problematic for Greenberg. It’s been nearly two years since AIG reached its settlement with regulators, and people on Wall Street believed that Greenberg’s legal woes were limited to the shrinking New York Attorney General’s case.
Greenberg’s advisers have suggested that the SEC’s case against him was barely alive since the investigation into Greenberg himself began more than two years ago.
Amid all this, Greenberg has made great strides in remaking his reputation as one of the great CEOs of the modern era, by launching a massive public relations blitz and speaking out on corporate governance issues and other topics.
But the SEC’s interest in Greenberg is now heating up, CNBC has learned. The SEC is still investigating two issues that involve the former AIG chief: Greenberg's role in the various decisions and transactions that led to the accounting restatement, including a deal between AIG and Berkshire Hathaway's General Re subsidiary, and whether he improperly ordered AIG’s traders to prop up shares of the company stock.
Greenberg, through a spokesman, declined to comment. An AIG spokesman also had no comment. An SEC spokesman had no comment.
While Greenberg’s dealings with regulators have been limited until now, he’s been spending a good deal of time waging an all out war with officials at AIG. Greenberg recently sued the company, charging that the accounting restatement hurt investors because he did nothing wrong.
AIG has sued Greenberg as part of shareholder litigation over the accounting restatement, and officials there have made no secret that they thought the SEC was dragging its feet in bringing a case against Greenberg.
Indeed, the fact that Greenberg will be giving a deposition doesn’t mean charges are imminent or will be filed at all. The SEC has not issued Greenberg a so-called Wells Notice, signaling its intention to charge him with civil violations.
Meanwhile, the commission has been known to depose alleged targets at the end of investigations just before they are formally cleared of wrongdoing.