AIG to arbitrate disputes with Greenberg, Smith

NEW YORK -- American International Group says it is looking to mend ties with former CEO Maurice "Hank" Greenberg and former Chief Financial Officer Howard Smith by settling their disputes through arbitration.

A private settlement could put an end to the legal tussle between the struggling insurer and its former executives and offer AIG new business opportunities.

Rumors of improving relations sent AIG shares surging last week.

Greenberg was ousted from New York-based AIG amid an accounting scandal in 2005. The Securities and Exchange Commission charged both Greenberg and Smith with misstating the company's earnings.

Greenberg, instrumental in AIG's rise from a small firm to the world's biggest insurer, is fighting the company over the use of funds in an employee retirement plan.