Business & Finance
Maurice "Hank" Greenberg, whose long tenure at the helm of American International Group has turned turbulent in recent months, resigned Wednesday from the board of the giant insurance company he founded and led for almost 40 years. He already had quit as chairman and chief executive of the company, which is the subject of a civil suit brought by New York State regulators, who have charged it with misleading investors by manipulating financial results. Greenberg claimed he had been shut off from the company and that his "inability to receive information" about its operations prevented him from carrying out his fiduciary duties. AIG, known for providing property, casualty, and specialty insurance, is based in New York.
HealthSouth Corp., the medical services giant, agreed to pay $100 million to settle a lawsuit brought by the Securities and Exchange Commission that charged it with massive accounting fraud. The Birmingham, Ala., company will make the payments in five installments, beginning in the fourth quarter of this year. The suit accused HealthSouth of inflating earnings to the tune of $2.64 billion between 1996 and 2003. The company, which then struggled to avoid bankruptcy, fired chief executive Richard Scrushy two years ago. He is awaiting the jury's verdict in his federal trial on 36 counts of orchestrating the fraud.
In a "merger of equals" valued at about $1.5 billion, the financial services group Britannic said it will acquire Resolution Life Group Ltd. The all-stock deal is aimed at creating a vehicle to compete in a growing life-insurance industry trend: buying and managing carriers that are "closed" - meaning that they no longer seek new business because of the falling value of their investments. According to some predictions, closed-life funds could double in Britain alone over the next five years. The combined company will adopt Resolution's name and will be based in Birmingham, England.