Warren Buffett is called as a witness in the finite case that caused Hank Greenberg to leave AIG

Berkshire Hathaway boss Warren Buffett has been called as a witness in a federal trial against five former insurance executives.

They are accused of devising a fraudulent finite reinsurance transaction between American International Group and General Reinsurance Corp.

As reported in Global Reinsurance on 2 February 2006, the former insurance executives — four from the Gen Re, a unit of Berkshire Hathaway, and one from AIG — were indicted by a federal grand jury on charges of fraud, conspiracy and lying to the Securities and Exchange Commission in connection with a scheme to inflate AIG’s reserves.

The Gen Re defendants include former CEO Ronald Ferguson, former CFO Elizabeth Monrad, Robert Graham, the former assistant general counsel and Christopher Garand, chief underwriter.

The AIG defendant is Christopher Milton, who oversaw the company’s reinsurance activities.

The case is directly linked to Maurice “Hank” Greenberg’s unceremonious stepping down as CEO of AIG in March 2005.

After the SEC and then New York attorney general Eliot Spitzer called into question the finite transactions that AIG CEO Greenberg may have personally directed with Gen Re, Greenberg stepped aside "to protect the company I built".