Global Review: US - Greenberg contests AIG restatement.

(From Reinsurance)

Maurice Greenberg, the former chief executive of American International Group (AIG), has contested the insurer's $3.9bn profit restatement, telling investigators that much of it was unnecessary.

In a memo to US regulators, Greenberg's attorneys said AIG and PricewaterhouseCoopers, its auditor, had the relevant information before the corrections were made and changed rules 'retroactively'.

Accounting adjustments by senior managers were never done without the auditor's knowledge and involved many people, including - in some instances - Greenberg's replacement, Martin Sullivan, according to the memo.

"AIG's rush to concede wrongdoing may be explained in part by the current regulatory environment," said the memo released by Mr Greenberg's lawyers.

"Many of the restatement items appear to be exaggerated and unnecessary."

Both Mr Greenberg and AIG are currently facing probes by the Securities and Exchange Commission and Justice Department, as well as a fraud lawsuit from New York Attorney General Eliot Spitzer. The company blamed former managers for skirting internal controls to alter its books, lowering net income from the past five years by 10% to correct reinsurance contracts and other transactions that hid liabilities and inflated underwriting income.