Hank Greenberg built AIG into a $1 trillion behemoth that needed the biggest bailout in history—but quietly, the former CEO has begun a new insurance company, CV Starr, that is poaching some of AIG's leading talent. He just got an unintended assist from the Treasury: Tough new pay rules at AIG have sent employees fleeing to Greenberg, further hurting the mega-company's ability to pay back the taxpayer. "Basically, he's just starting AIG Two and raiding people out of AIG One," said one insurance exec.
Greenberg, who was booted from AIG in 2005 in an accounting scandal, insists that he had no role in bringing super-risky derivatives trading into the company's program, and his new venture has no financial products unit. CV Starr is a private company, disclosing little about its business plan—but it's already big, renting out three floors of a Manhattan building that once housed Lehman Brothers. According to one insurer, "It’s just a matter of time before the valuation of what he’s building is greater than the valuation of AIG."