Friday, July 08, 2005

Catching up on Business News: AIG Hires Arthur Levitt as Advisor

The week has flown by, but here's a story I didn't want to slip by without comment. AIG, which fired its longtime CEO Maurice Greenberg in the wake of an accounting scandal, hired former SEC chief Arthur Levitt to advise the company on how to recover from its troubles:
"He will advise AIG on a wide range of corporate governance matters, work with AIG as it seeks to recruit the best qualified directors to represent all AIG shareholders and assist AIG as it reaches out to all of its shareholders," said AIG President and Chief Executive Martin Sullivan.
After reviewing questionable reinsurance contracts, AIG restated $3.9 billion in revenue over the last five years. AIG has done what any corporation needs to do in similar circumstances: acknowledge the problem, take steps to correct the problem, and convince the public that there isn't more bad news coming. Hiring Levitt, who was an unabashed champion of shareholder rights while at the SEC, is a step that is sure to create more confidence in the company. The stock has recovered some of it's lost ground since it fell from $73.46 to $49.91 earlier this year, closing at $60.05 today.
(Disclosure: I bought some AIG shares this spring after concluding that it's core business was still sound. Not that anyone cares what I think.)

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