Still remember the accounting scandal of American International Group (AIG) a few years ago, which caused the former CEO Greenberg to step down from AIG?
On 9 Feb 2006, SEC filed a complaint alleging that from at least 2000 until 2005, AIG materially falsified its financial statements through a variety of sham transactions and entities and that AIG reported materially false and misleading information about its financial condition. On 17 Feb 2006, the court entered a final judgment against AIG, to which AIG consented without admitting or denying the allegations in the complaint and paid a total of US$800 million on 3 Mar 2006 (US$700 million in disgorgement and US$100 million in penalties). On 14 Jun 2007, the court entered an order authorizing SEC to establish a Fair Fund to include all of the funds paid by AIG.
On 14 Apr 2008, the U.S. District Court for the Southern District of New York approved a distribution plan for the Fair Fund. The court-appointed Distribution Agent will administer the distribution of the Fair Fund to eligible current and former shareholders of AIG.
The AIG distribution is expected to be completed by the beginning of 2009. The funds are on deposit in the court's registry earning interest. Potentially eligible claimants include:
- Any person or entity that purchased AIG common stock during the period from 8 Feb 2001 to 31 Mar 2005 who (1) sold at a loss on or after 14 Feb 2005; and/or (2) held after 31 Mar 2005.
- Any person or entity who purchased certain AIG-affiliated fixed-income securities during the period from 8 Feb 2001 to 31 March 2005 who (1) sold on or after 24 Mar 2005; and/or (2) held after 31 Mar 2005.
The Sarbanes-Oxley Act of 2002 provided the SEC with authority to increase the amount of money returned to injured investors by allowing civil penalties to be included in Fair Fund distributions. Prior to SOX, only disgorgement could be returned to investors.
Is it a role model for Hong Kong?
No comments:
Post a Comment