News focus - US Grand Jury indicts ex-AIG executives by.

(From Reinsurance)

A federal grand jury in Norfolk, Virginia, US has indicted three former senior executives of General Re Corporation (Gen Re) and one former senior executive of American International Group (AIG) on charges relating to a fraudulent scheme to manipulate AIG's financial statements, according to the US Department of Justice.

The indictment charges each of the following individuals with one count of conspiracy to commit securities fraud, four counts of securities fraud, two counts of causing false statements to be made to the Securities and Exchange Commission (SEC), four counts of wire fraud and two counts of mail fraud: Ronald Ferguson, 63, of Fairfield, Connecticut, who was Gen Re's chief executive officer from about 1987 through September 2001; Elizabeth Monrad, 51, of New Canaan, Connecticut, who was Gen Re's chief financial officer from about June 2000 through July 2003; Christian Milton, 58, of Winnewood, Pennsylvania, who was AIG's vice-president of reinsurance from about April 1982 until March 2005; and Robert Graham, 57, of Westport, Connecticut, who was a Gen Re senior vice-president and assistant general counsel of Gen Re from about 1986 through October 2005.

The indictment charges that the defendants engaged in a fraudulent scheme to make it appear as though AIG increased its loss reserves, a key financial indicator to analysts and investors. At issue are two allegedly sham reinsurance transactions between subsidiaries of ...