NEWSMAKER-AIG chief Sullivan loses his job amid subprime woes

lunes 16 de junio de 2008 04:23 CEST
 

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By Lilla Zuill

NEW YORK, June 15 (Reuters) - Martin Sullivan may have ushered AIG through regulatory assaults from former New York Attorny General Eliot Spitzer, but he wasn't strong enough to survive losses from the subprime crisis that have badly hurt the world's biggest insurer.

The Englishman, known for being quick with a joke and for his shock of white hair, came into office three years ago after an accounting scandal that brought down his one-time mentor, AIG's legendary former CEO Hank Greenberg.

He left the post on Sunday partly as a result of separate accounting questions.

Sullivan's departure after only three years on the job comes after AIG posted two consecutive quarters of record losses, stemming from about $20 billion in write-downs on assets linked to risky subprime mortgages. In recent weeks, several large AIG shareholders have been pushing for his ouster.

AIG installed Robert Willumstad, a former Citigroup Inc executive, to replace him. (To read the full story on Sullivan's resignation and management changes, click on [ID:nSP178665])

Sullivan joins a growing list of Wall Street executives, including Citigroup's (C.N: Cotización) Charles Prince, and Merrill Lynch & Co's MER.N Stan O'Neil, who have lost their jobs as risky U.S. subprime investments took a toll on each corporation's bottom line.

The U.S. Securities and Exchange Commission has launched an investigation into whether AIG may have overvalued the derivative contracts that led to the costly write downs.   Continuación...