Former American International Group Inc. (AIG:US) Chief Executive Officer Maurice “Hank” Greenberg asked New York’s highest court to let him challenge parts of a ruling that allowed a state lawsuit against him to proceed.
An appeals court in Manhattan last week affirmed New York state Supreme Court Justice Charles Ramos’s October 2010 order denying motions by Greenberg and former AIG Chief Financial Officer Howard Smith to dismiss the lawsuit.
Former New York Attorney General Eliot Spitzer sued Greenberg and Smith in 2005 in state court in Manhattan, accusing them of using sham reinsurance deals and other transactions to distort the insurer’s financial condition.
Greenberg and Smith today filed court papers asking the state Court of Appeals in Albany for permission to challenge parts of the appellate court ruling, said David Boies, an attorney for Greenberg with Boies Schiller & Flexner LLP. The filing couldn’t immediately be confirmed with the court.
“This case was filed almost seven years ago,” Boies said in a statement. “In that time, almost all of the original allegations have been rightfully dismissed. All that remains in dispute are two transactions, each of which are more stale than the case itself, and neither which were material to AIG.”
The main issue that should be resolved by the Court of Appeals is whether the New York attorney general may invoke the state’s Martin Act securities fraud statue and executive law to attempt to recover monetary damages from a class of private shareholders, Boies said.
The state laws “conflict with the federal laws specifically enacted to provide uniformity and certainty in the regulation of nationally traded securities,” Boies said.
“We also believe the Court of Appeals should resolve questions regarding the evidentiary standards under which a defendant’s motion for summary judgment may be opposed,” he said.
The defendants’ efforts to seek further review is “completely without merit,” James Freedland, a spokesman for the New York Attorney General’s Office, said in an e-mailed statement.
“We are pleased that the court has paved the way for a trial to hold the defendants accountable for perpetrating a major reinsurance scheme to defraud investors, and we are confident that their latest attempt to reverse decades of settled law to escape responsibility for their misconduct will be rejected,” Freedland said.
The appellate court in last week’s ruling also reversed Ramos’s order granting the attorney general’s request for summary judgment on another transaction known as CAPCO, saying that “summary resolution of their knowledge or participation in this alleged fraud cannot be determined as a matter of law.”
The case is State of New York v. Greenberg, 401720-2005, New York state Supreme Court (Manhattan).
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