In advisory ruling, jury backs Greenberg in AIG suit

NEW YORK -- American International Group has lost a round in its court battle against former CEO Maurice "Hank" Greenberg.

In an advisory decision Tuesday, a federal jury found that an investment firm controlled by Greenberg did not have to reimburse AIG for shares taken from a company retirement bonus fund. The jury in U.S. District Court in Manhattan made its finding just hours after getting the case.

U.S. District Judge Jed Rakoff said he would issue a ruling in the case by the end of August.

"I give considerable weight to an advisory verdict, but in the end, it is something that the court has to determine for itself and I will make my own findings of fact and consultations of law," Rakoff said.

The jury deliberated for about half a day before issuing its decision.

The New York-based insurance giant accused Greenberg, through a company called Starr International that he controls, of plundering an AIG retirement program composed of $4.3 billion in stock. The questions raised during the civil trial boiled downed to who controlled the fund, and what its purpose was.

AIG has received $182.5 billion in federal aid since last fall. The company said it would use any proceeds from the trial to repay some of its loans from the government.

The insurer's attorney, Theodore Wells, said only that he was "disappointed in the verdict."

Greenberg, who testified during the first week of the trial that began June 15, was not present for the jury's decision.

David Boies, Starr International's attorney, said: "I think the quickness of the decision reflects the simplicity of the case. I would be hopeful that the judge would see it the same way the jury does."