In fact, since the collapse of AIG was perhaps the most important event in causing the financial crisis of 2008 to spiral out of control, you can put Hank Greenberg on the very short list of individuals who are most responsible for the economic catastrophe. A few weeks ago I put former Countrywide chief Angelo Mozilo, former Lehman head Dick Fuld and Greenberg's former subordinate Joe Cassano (the former head of AIG's Financial Products unit) on that list, but Greenberg should be right there riding the bus of shame with all of those excellent folks.
It's this fact, not the merits of the actual lawsuit, that make this news story so outrageous.
Like all narcissists, Greenberg is physically incapable of admitting any mistake he's ever made, and he's made plenty of them. Among other things, Greenberg in 2000 helped AIG artificially bolster its reserves by green-lighting a phony reinsurance transaction with a company called General Re (a subsidiary of Warren Buffett's Berkshire Hathaway) that puffed up AIG's loss reserves by about $500 million.
Even though a federal judge ruled that Greenberg was a conspirator in that case, and even though that scandal led to AIG in 2006 paying what at the time was the biggest settlement ever ($1.6 billion, paid to Eliot Spitzer's New York state regulators and George W. Bush's Justice Department and SEC), Greenberg has always denied responsibility, and his bumlicking minions in the financial press like Maria Bartiromo are still protesting his innocence long after everybody on Wall Street forgot about the case (that was nineteen billion-dollar scandals ago!).
