NEW YORK-American International Group Inc. has submitted a settlement offer to securities regulators and federal prosecutors relating to their investigations of financial transactions between AIG units and PNC Financial Services Group Inc. and mobile-phone distributor Brightpoint Inc.
Details of the settlement were not disclosed.
New York-based AIG had previously announced that its AIG Financial Products Corp. subsidiary was the subject of investigations by the Securities and Exchange Commission and the U.S. Department of Justice. Those probes were examining certain structured transactions the AIG unit had entered into with Pittsburgh-based PNC and Brightpoint, a Plainfield, Ind.-based wireless company.
In the PNC investigation, the Department of Justice and SEC were examining deals between the AIG unit and PNC that involved the transfer of $762 million of volatile, troubled or underperforming loans and venture capital assets to three special-purpose entities in 2001.
Last year, AIG reached a $10 million settlement with the SEC over charges that it had provided retroactive coverage to Brightpoint that allowed the company to offset losses on its balance sheet without transferring any risk to AIG. In October, a federal grand jury launched an investigation of that deal.
In the latest announcement, AIG states that SEC staff have agreed to recommend the settlement to the SEC and that it has also reached “agreement in principle” with the Department of Justice.
Gavin Souter is a reporter for Business Insurance, a sister publication to RCR Wireless News.
