AIG CEO To Step Down

By Francine • Jun 16th, 2008 • Category: Pure Content


Now, please tell me PwC is next.  It would be a breath of fresh air all the way around.  Why wouldn’t PwC want to draw a bright line under their potential liability for this mess?

(At least one article mentions PwC, but PwC doesn’t comment, as usual.)
AIG Chief Expected to Step Down
The board of American International Group Inc. is meeting today to accept the possible resignation of Chief Executive Martin Sullivan, according to a person familiar with the matter…

A decision to replace Mr. Sullivan, a 53-year-old AIG veteran who has worked at the company since he was 17, would underscore the seriousness of the problems facing the global insurance giant. Mr. Sullivan got the job when Maurice R. “Hank” Greenberg ended his nearly four-decade tenure atop AIG by stepping down in 2005 as the company was under investigation for its accounting.

At the heart of AIG’s current problems are the record-setting, multi-billion losses AIG has recorded in the last two quarters, and the severe drop in the company’s stock price, which has fallen by more than half since early October…

It’s not clear what a new chief executive, interim or permanent, can do to solve those problems amid ongoing upheaval in the mortgage and credit markets. No new CEO can cure what ails American real estate.

Most of AIG’s losses are driven by write-downs tied to subprime mortgages, and it could be some time before the company finds out what its losses ultimately will be. Until then, the uncertainty, and the prospect of more write-downs, may frighten off some investors…

And a new leader who isn’t closely tied to the Greenberg era could also have room to maneuver. Even as Mr. Sullivan tried to steer AIG past the accounting scandal, he had to contend with the fact that Mr. Greenberg – his onetime mentor – leads another firm, Starr International Co., that is AIG’s largest shareholder…


Share

Francine is
Email this author | All posts by Francine

3 Responses »

  1. Francine,

    I saw PwC from the inside and my god, at times i thought i was in a movie. Over the 3 years i worked there, they had fundamental audit and accounting errors on virtually EVERY SINGLE AUDIT i worked on. I am talking about accounting 101 stuff here. On one audit, where my basic questioning and thoughts resulted in the client changing their method of revenue accounting, i ended up clashing with the partner because i told him that i felt i had a major impact on the quality of our audit opinion compared to previous years. Eventually i got fired. But the basic audit and accounting errors i saw on PwC audits, including some very large SEC clients, left me speechless regarding whether they really know what they are doing. When AIG reappointed them, i just threw my hands in the air and gave up. God bless american shareholders who rely on these firms to protect them.

  2. I used to work as an auditor at PwC as well and can only say these are the same guys that audited TYCO in Bermuda and those guys that turned a blind eye to their corruption were promoted within PwC.
    Question: Where is the worthless PCAOB as these are supposedly the watchdogs that watch the watchdogs?

  3. [...] with few strings, and outright propping up by purchasing majority stakes in entities such as AIG, Fannie Mae and Freddie Mac a nationalization. Why? Stubborn pride. But, more importantly, a [...]

Leave a Reply