AIG Names Levitt as Special Board Advisor

Insurance giant American International Group Inc., under fire for alleged improper accounting, named former Securities and Exchange Commission Chairman Arthur Levitt as a special advisor to its board Tuesday.

Levitt, 74, will help AIG choose new board members and advise it on structure and governance issues, the company said in a statement. He left his post at the SEC in 2001 after making financial fraud the agency’s chief enforcement priority for the last two years of his more than seven-year tenure.

AIG, the world’s largest insurer, is trying to restore investor confidence after accounting probes by New York Atty. Gen. Eliot Spitzer and the SEC wiped out more than $35 billion of the company’s stock market value.

Spitzer’s suit accused the company and former Chairman and Chief Executive Maurice “Hank” Greenberg of using sham reinsurance contracts and other transactions to mislead investors and regulators. The company has since restated five years of earnings, lowering net income by $3.9 billion, or 10%.

Levitt is a senior advisor to buyout firm Carlyle Group Inc. and a board member of Bloomberg, parent of Bloomberg News.

Shares of AIG rose 88 cents to $59.49.