Greenberg was ousted as head of the insurance giant AIG in 2005 for allegedly engaging in accounting fraud (allegations were levied by former Attorney General and Governor of New York Elliot Spitzer). All the criminal charges were eventually dropped, though some civil claims remained unresolved. In August 2009, Greenberg agreed to a deal with the Securities and Exchange Commission to pay $15 million in penalties and disgorgement for overseeing fraudulent transactions at AIG. The transactions led to an accounting restatement by AIG of at least $2 billion, but Greenberg said the vast majority of the restatement "was unnecessary." Shortly after agreeing to settle, he issued a statement claiming he had "no responsibility" for the fraud.
From the New York Times: "While America generally loves stories of entrepreneurs making a comeback, Mr. Greenberg’s success may be at the expense of taxpayers. People who work in the industry say that if he is already luring A.I.G.’s people, he may soon be siphoning off its business and, therefore, its means to repay its debt to the government. “To me, it’s just going to be a matter of time before the valuation of what he’s building is greater than the valuation of A.I.G.,” said Andrew J. Barile, an insurance consultant in Rancho Santa Fe, Calif.
A.I.G., meanwhile, is struggling to regain its footing. The recipient of the biggest taxpayer bailout in history, it has been ordered by the government to restructure, unwind its complex derivatives and pay back the taxpayers."To those that appear downright frightened by the thought that a deposed CEO of one of the Corporations responsible for nearly collapsing the global economy is restructuring and retooling, with a new company, note that Greenberg and his new C.V. Starr & Company just this month (October 2009), leased 141,000 square feet of space — three stories — on Park Avenue in Manhattan, in one of Lehman Brothers' old headquarters. Further, Greenberg has previously, expressed an interest in buying one of AIG’s prizes, a sprawling global insurance group, but only if he could buy the whole thing.
Also in 2009, AIG took Greenberg to court, accusing him of plundering $4.3 billion in stock from a trust that it says was set up to pay top performers. However, in July 2009, a federal jury ruled that Greenberg had not wrongly seized the stock and was therefore not required to reimburse the company.