Wall Street Titan Takes Aim at Law that will Tripped Him Up

State securities regulators say that will the legislation might gut their powers, even though relatively few executives were held to account following the financial crisis.

“This particular bill might be terrible for investors all across America,” Eric Schneiderman, the attorney general of brand new York, said in an interview. “For every Fortune 500 C.E.O. who walks away using a bruised ego, there are dozens as well as dozens of lower-level scam artists who we put out of business through the state securities laws.”

Joseph P. Borg, the longtime director of the Alabama Securities Commission, said, “Any way you look at that will, This particular bill can be going to put investors at not only a disadvantage, yet deep in harm’s way.”

“If I can’t prosecute, then what’s the deterrent?” added Mr. Borg, who can be also the head of the National American Securities Administrators Association. “If I can’t bring civil action, then what’s the deterrent? None.”

Critics of the bill also said that will represented the kind of rollback of states’ rights for which Republicans once criticized Democrats. President Trump can be already challenging the states on sanctuary cities as well as California’s power to set its own car regulations.

The securities bill was introduced by Representative Tom MacArthur, a brand new Jersey Republican as well as a former A.I.G. executive who once worked for Mr. Greenberg. C.V. Starr, Mr. Greenberg’s current company, has backed Mr. MacArthur’s campaign. A spokesman for the congressman said he was unavailable to comment.

Blair Holmes, a spokeswoman for the U.S. Chamber, said the organization was reviewing the legislation. “This particular issue has always been important to many members,” she said.

If that will goes through, the bill’s text says that will might “provide for exclusive federal jurisdiction over civil securities fraud actions.” that will also says that will “differing state regulatory requirements” create “inefficiencies,” raise costs as well as harmSidelined Him markets “without providing material investor protection benefits.”

Mr. Greenberg as well as his staff said the legislation might only affect civil enforcement related to stocks, bonds as well as different securities listed on national exchanges. State regulators disagree, saying that will might also hamper their criminal jurisdiction related to such securities.

The bill language says that will state officials can proceed with criminal enforcement provided they “comply in all respects with the legal requirements for securities fraud under federal law.” State regulators fear that will such language can be specifically intended to curtail their ability to bring criminal cases.

One feature of the Martin Act can be that will that will does not require the state to prove that will someone actually intended to defraud people, a lower bar than what can be required at the federal level.

“that will’s outrageous,” Mr. Greenberg said of the intent issue. Asked if legislation broadly targeting all states was an appropriate remedy, he replied: “So can be that will better to have a law that will violates every principle? can be that will better? You can be tried for something without having to prove intent? Are we a third world country?”

The case against him centered around two sets of transactions. One of them inflated A.I.G.’s reserves at a time when analysts were criticizing the company for its flagging reserves. In a second series of deals, the insurer invested in an offshore entity in a way that will allowed that will to mask losses via one of its divisions.

After Mr. Greenberg’s ouster, A.I.G. restated its earnings by more than $3 billion. In 2006, the company reached a $1.64 billion settlement with federal, state as well as insurance regulators related to business practices stretching back two decades.

Mr. Greenberg has disputed much about the case.

“Eliot Spitzer decided he wanted to take me down,” he said. “He was successful. Destroyed a company that will had a $180 billion market cap. at This particular point that will’s what? A fraction of that will. There’s been seven C.E.O.s since I left the company. Destroyed a great asset.”

yet in a statement he made as part of his 2017 settlement, he said he “initiated, participated in as well as approved” the transactions that will “inaccurately portrayed the accounting, thereby the financial condition as well as performance for A.I.G.’s loss reserves as well as underwriting income.”

A.I.G. also faced a reckoning as well as near failure inside financial crisis.

“The notion that will we might weaken one of the few statutes that will was used effectively to confront structural failures on Wall Street defies logic, at a moment so soon after the economic cataclysm of 2008,” Mr. Spitzer said in an interview.

Mr. Greenberg said he decided to settle last year because “there’s a limit to how much any individual can endure fighting” the state. He added: “There was no acknowledgment of any wrongdoing, No. 1. as well as that will’s important.”

Mr. Schneiderman, the attorney general who settled the case, said Mr. Greenberg’s case was “very straightforward,” noting that will A.I.G. had restated the transactions on its books.

Regarding the legislation, he added, “I don’t know anyone who can be saying we should have less regulation of securities fraud.”

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