Show Buffett the Door

If a suspect insurance deal can topple AIG's (AIG) imperious CEO, Hank Greenberg, there's no reason it can't also bring down Warren Buffett, America's most-revered investor and CEO of Berkshire Hathaway (BRKA).

The deal, which AIG and Berkshire subsidiary General Re forged in 2000, is being probed by New York Attorney General Eliot Spitzer and the Securities and Exchange Commission. The regulators are exploring the possibility that the deal was done not as a proper insurance transaction that included real risks, but instead to make AIG's financial performance look better than it was. But General Re may have done the deal to make its own performance look better as well.

For AIG, at least, there were two potential motives for manipulating results: The company wanted to fend off criticism that it wasn't keeping enough reserves for future claims, and, second, it wanted to keep its stock up as it launched a bid for a large life insurance company in April 2001.

Greenberg will remain at AIG, a company he built into an insurance industry powerhouse, as nonexecutive chairman. However, very few observers expected he would leave the CEO post so quickly. After all, he showed little desire to leave in the past 12 months, when two other similar AIG deals were singled out by regulators.

The fact that a hugely influential fighter like Greenberg has gone so easily strongly suggests that Buffett soon may also be asking whether retiring makes sense. If Buffett, America's second-richest man, did step down as CEO, it would bring a shocking and disappointing end to the most successful investing career America has ever seen. It would also be ironic because Buffett has spent much of his career lecturing corporate America on the need to present clear and dependable financial statements.

So how likely is it that Buffett will suffer the same fate as Greenberg?

Greenberg's rapid descent from the CEO post comes amid reports that he was personally involved in the deal that's being scrutinized by Spitzer and the SEC.