A federal jury yesterday convicted five former insurance executives of fraud, conspiracy, and making false statements to the Securities and Exchange Commission as part of a scheme to deceive investors, Bloomberg reports. The convictions stem from a sham transaction in 2000 between General Reinsurance Corp. and American International Group that added $500 million in loss reserves to AIG’s accounts to soothe investor concerns.
"These five defendants made the choice to lie to AIG's investors and to deprive them of the opportunity to make informed decisions about their stock," said the lead prosecutor. Former General Re CEO Ronald Ferguson and CFO Elizabeth Monrad were among those found guilty and face 20-year jail terms. They plan to appeal. Warren Buffett’s Berkshire Hathaway owns General Re. He faced no charges. (Read more General Reinsurance stories.)