AIG Adds Derivatives Blunder

"We now know that there were serious issues with our internal controls, and that it is necessary for us to address those issues and strengthen our controls," he said.

Manhattan-based AIG, under investigation by New York Attorney General Eliot Spitzer over how it accounted for some transactions with some subsidiaries, said it will restate its fiscal 2000, 2001, 2002 and 2003 statements and the March, June and September quarters for 2004.

The investigation of AIG over its business with reinsurance firms has led to the dismissal of a number of executives, including the forced resignation of Maurice "Hank" Greenberg, who ruled the firm with an iron hand for nearly four decades.

AIG has lost $58 billion in market value since its troubles came to light in February. Shares closed Friday in NYSE trading at $50.85, down 29 cents.