Last week, I asked here whether former AIG CEO Maurice “Hank” Greenberg had "blown up his settlement" with the SEC through comments made on his behalf following the settlement. To recap, the following statement was issued on behalf of Greenberg immediately following his SEC settlement:

Mr. Greenberg has consistently made clear that he personally never engaged in any fraud whatsoever and that the vast majority of AIG’s Restatement was unnecessary and concerned accounting issues for which he had no responsibility,” the statement said. “He also made clear to the SEC that he would never settle a charge of securities fraud, even if the settlement did not require him to admit the charge, and that he was confident that he could defeat in court any such claim if it were made.

The SEC promptly responded to this statement, saying that Greenberg had mischaracterized the case against him. The next day, SEC spokesman John Nester stated that

Under the governing law, the charge against Mr. Greenberg as a control person with respect to AIG’s alleged securities fraud requires his culpable participation in the underlying fraud. The charge carries no suggestion that Mr. Greenberg was not a participant in fraudulent acts. Moreover, the settlement does not express any view that minimizes Mr. Greenberg’s role in any of the transactions that have been the subject of restatement by AIG.

I asked whether a rare "No-Spin Zone" violation might have occurred via Greenberg's statement, with the key question being whether the SEC deemed Greenberg's statement to be a denial of the SEC's charges against him. If so, it would violate the terms of the settlement agreement in which Greenberg agreed to settle the case without admitting or denying the allegations against him.

From the looks of things, however, it looks like the SEC will not move to vacate the settlement based on Greenberg's comments. First, nearly a week later there has been no public action by the SEC to vacate the settlement. Second, I understand that a subsequent statement on Greenberg's behalf that tempered his initial statement of earlier that day may have helped smooth things over. The statement on his behalf, made late on August 6, was as follows:

When Mr. Greenberg was quoted in the Wall Street Journal earlier today as saying that the $15 million paid by him was "not an insignificant amount," he was referring to the penalty of $7.5 million and the disgorgement of $7.5 million that he agreed to pay in settling the section 20(a) charge that was filed today by the SEC. The size of that payment is a reflection of the importance of the charge to the SEC and Mr. Greenberg's willingness to make it is a reflection of his recognition of that importance.

While Mr. Greenberg indicated that he is pleased with the terms of today's settlement, he recognizes the seriousness of a control person charge, and the significance with which the SEC treats it.

Despite the parties' agreement as to the specific elements of AIG's 2005 Restatement included in the control person charge, the parties continue to disagree as to the appropriateness of other components of the Restatement. Mr. Greenberg was not meaning to suggest in his public statements that the SEC shares his view as to appropriateness or inappropriateness of the Restatement as a whole.