American International Group Inc., one of the biggest U.S. insurance companies, announced a tentative agreement Tuesday to settle government allegations that it helped customer companies commit accounting fraud.
AIG said staff attorneys at the Securities and Exchange Commission had agreed to recommend to the five SEC commissioners that they approve a company settlement offer. It also said it had agreed in principle with the Justice Department on a settlement.
Terms of the offer to the SEC and the agreement with federal prosecutors were not specified.
Spokesmen for the SEC declined to comment. Justice Department spokesmen could not be reached immediately for comment.
The insurer previously disclosed that the SEC was considering a lawsuit alleging civil securities fraud over several 2001 transactions it conducted with regional bank PNC Financial Services Group Inc. The Justice Department, AIG said, was weighing criminal prosecutions in both the PNC matter and one involving cellphone distributor Brightpoint Inc.
By signing agreements with the Justice Department, New York-based AIG would avoid prosecution.
AIG settled the Brightpoint case with the SEC in September 2003, agreeing to pay a $10-million civil fine to resolve allegations that it helped the company falsify its earnings report and hide losses. As in all SEC settlements, AIG neither admitted nor denied the allegations.