Government Still Pursuing Greenberg Case 9 Years Later
Some question if what's left of the case is worth the effort.
David Boies of Boies, Schiller & Flexner, lead counsel for Greenberg, suggests the case won't go away because the attorney general continues to fight "over the carcass of a case where all the significant items have been dismissed and all the damage claims, even for the two items that remain, have been dismissed."
With damages and Martin Act claims off the table, Schneiderman is seeking disgorgement of bonuses Greenberg and Smith received, and injunctive relief to bar the two from the securities industry and prevent them from serving as directors or officers of a public company.
A legal question remains over whether the attorney general has standing to attain disgorgement. Critics suggest that barring the defendants from the industry is pointless. Greenberg, who is 88 and now runs C.V. Starr & Co., a privately held financial services firm, has said he has no intention of taking that firm or any other public, or working in the securities industry; Smith 67, vice chairman of C.V. Starr, has also indicated that he has no plan to get involved in a public company.
"The damages case is gone, totally," Boies said in an interview. "Instead of giving the case the decent burial it deserves, an attempt has been made to keep it going on life support."
Vincent Sama of Kaye Scholer, who represents Smith, said his client has already served a three-year ban from serving as a director or officer of a public company that resulted from a federal Securities and Exchange Commission probe. He said Smith has no intention of serving as a director of a public company.
"The case has gone on for too long and should be dropped," Sama said. "There just doesn't seem to be any basis for it any longer."
Schneiderman's office, however, said that formally barring Greenberg and Smith from the securities industry is vital to protecting consumers, reforming the market and making the point that the rich and powerful cannot evade justice.
Spitzer, who is no longer in public office but continues to watch the progression of the case he initiated, agreed.
"Those who have been injured have been compensated, but the state still has an overpowering argument ... in vindicating the state's right to impose an obligation to report accurately and forthrightly," Spitzer said in an interview. "Playing the game the right way is what capitalism is all about."