Four former executives of Stamford based company General Re go on trial in Hartford today in a case that could touch one of the titans of the financial world, Berkshire Hathawayâ€™s Warren Buffett.
The four are accused, along with a former executive of insurer American International Group, of manipulating AIGâ€™s financial statements in a deal between the two companies. Itâ€™s claimed that the four structured two reinsurance deals between General Re and AIG that were intended to make it appear as if AIG had increased its loss reserves. Itâ€™s alleged the move was intended to quell criticism from analysts, and boost the companyâ€™s stock price artificially.
General Re is owned by Berkshire Hathaway, and in pre-trial hearings some of the defendants have claimed that the deals were personally approved by Warren Buffett. Buffett has not been accused of any wrongdoing, and has previously said he was not briefed on the transactions and did not provide authorization. But the judge in the case in federal court has said he will allow one of the defendants to present an exhibit at opening arguments which will list Buffett as being involved in the deals. The trial could also reveal more about the role of Hank Greenberg, the former CEO of AIG who resigned after 37 years at the top of the company in 2005. Allegations of accounting irregularities, including the General Re transactions, led to his downfall.