Greenberg to Leave AIG

Maurice Greenberg will retire as chairman of American International Group(AIG Quote - Cramer on AIG - Stock Picks) within the next few days, severing his ties with the insurance giant he helped build, the company said.

Meanwhile, The Wall Street Journal reported Tuesday that Warren Buffett will be questioned next month about a 2000 transaction between a subsidiary of his Berkshire Hathaway(BRK.A Quote - Cramer on BRK.A - Stock Picks) holding company and AIG.

Greenberg, who was stripped of his CEO title earlier this month amid a widening probe of the company's reinsurance transactions, informed AIG directors of his intentions via a letter from his lawyer late Monday.

"In order to lead meaningful changes in the industry and at AIG, the company and its officers and directors must resolve any outstanding questions or issues and move forward," the letter read. "To that end, Mr. Greenberg recognizes the need to promptly and cooperatively resolve all inquiries and investigations by regulators and other authorities."

Word of the retirement comes amid reports that as many as 12 AIG executives have been subpoenaed by the Securities and Exchange Commission in the investigation of the insurance giant's accounting.

The agency, along with New York Attorney General Eliot Spitzer and several other regulatory bodies, continue to probe AIG's 2000 reinsurance transaction with Berkshire Hathaway's General Re unit, as well as potentially dozens of other transactions with a network of small, offshore reinsurance firms over which AIG might have exerted undue influence.

According to the Journal, Buffett will be questioned April 11 by officials with Spitzer's office and the SEC. A source told the paper that investigators suspect that before General Re completed the transaction, the unit's then-CEO, Ron Ferguson, briefed Buffett.

AIG has been under regulatory scrutiny all year over its suspected use of various reinsurance strategies to lop poorly performing policies from its balance sheet. Most of the controversy has centered on whether the reinsurance transactions were subject to appropriate negotiation and risk-transfer, elements necessary for favorable accounting treatment.

Published reports over the weekend said up to 30 insurance transactions over the last five years at AIG might have relied on faulty accounting, and the company is weighing restatements of between $1 billion and $3 billion.

The bookkeeping overhaul could make it difficult for the insurance titan to file its annual report with the Securities and Exchange Commission before Thursday.

AIG's board met last week to discuss the problem and is still in talks with internal and outside investigators about the handling of any accounting revisions. A worst-case, $3 billion charge would erase only about one-third of the company's 2004 earnings, which were reported on a preliminary basis earlier this month. The company's long-term debt is currently rated triple-A by Moody's and Standard & Poor's, the highest possible rating.