Two former governors of New York, Mario Cuomo (D) and George Pataki (R), published an op-ed in the Wall Street Journal Monday arguing that the State of New York should drop its civil fraud case against former AIG CEO Hang Greenberg.
The case, which began under disgraced former Attorney General Eliot Spitzer, has been weakened considerably over time, and the state is no longer seeking damages after the certification of a class action lawsuit by AIG shareholders–led, ironically, by Greenberg–against the government’s 2008-9 bailout.
Cuomo and Pataki note:
Recently, the New York attorney general’s office recognized that under both state and federal law, the resolution of federal class actions brought by AIG shareholders had mooted the attorney general’s stated purpose in the civil litigation against Mr. Greenberg: the recovery of damages on behalf of AIG shareholders. As a result, the attorney general’s office informed the New York Court of Appeals on April 25 that it had decided to “withdraw our claims for damages in this case.”
This acknowledgment was long overdue and should have marked the end of this case. So we were surprised to learn that instead of dropping the litigation, the attorney general’s office has decided to deplete its resources and consume more of the court’s time by raising claims for injunctive relief against Mr. Greenberg that were long ago abandoned and that, in any event, are without merit and serve no conceivable purpose.
Cuomo and Pataki argue that dropping “a dead-end case that should never have been brought” would help not only to serve the ends of justice, but to improve concerns about regulatory uncertainty in New York’s financial sector.