AIG Stock Price Tanks As Concerns Mount

By Michael Ha

NU Online News Service, April 1, 4:25 p.m.EST?The share price of American International Group, whichadmitted Wednesday to accounting misstatements, dropped lowertoday.[@@]

AIG stock, traded on the New York Stock Exchange, ended the dayat $50.95 its biggest drop since October.

The insurer's share price has fallen 30 percent since Feb. 14when it was announced that AIG was subpoenaed by New York AttorneyGeneral Eliot Spitzer's office and the Securities and ExchangeCommission. The company has lost some $51 billion of market valuesince then.

There are also reports today that regulators have begun toinvestigate whether AIG manipulated its underwriting loss ratio byputting a cap on the figure. The Wall Street Journal, citingunidentified sources, also said a lawyer for former CEO andChairman Maurice Greenberg took out boxes of documents from AIG'sBermuda office last week, obstructing ongoing regulatoryinvestigations.

One investment analyst who helps clients buy stocks includingAIG shares said continuing uncertainties surrounding AIG are behindthe stock's price fall.

"Rating agencies have downgraded AIG, which is a cause of someconcern. AIG hasn't filed its 10-K, which is also causing someconcern. And there is the concern about AIG's finite riskarrangement," Thomas Russo from investment advisory firm GardnerRusso & Gardner told National Underwriter. Mr. Russohelps invest some $1 billion for the Lancaster, Pa.-based firm,including AIG shares.

"All these things have come together to create an atmosphere ofuncertainty and some investors are selling because they areunwilling to bear such uncertainties."