NEW YORK (CNN/Money) -
Insurer American International Group Inc. said Tuesday that the Securities and Exchange Commission staff is considering recommending action against it for alleged violations of the federal securities laws.
The company said it had received a so-called "Wells notice" from the enforcement agency. It was related to SEC's investigation of the transactions one of AIG's units had with PNC Financial Services Group Inc. prior to 2003.
Regulators say AIG's unit AIG Financial Products Corp. may have violated federal securities laws by helping create special business entities with PNC Financial Services for loans prior to 2003, including three transactions between June 2001 and November 2001.
The company said it believes the allegations are unwarranted and that it will respond to the notice from the SEC staff, who will then decide whether to make a formal recommendation to the agency's commissioners.
The transactions were the subject of an SEC probe against PNC in 2002. The Pittsburgh-based bank ultimately agreed to a formal settlement with the SEC, the Federal Reserve and the Office of the Comptroller of the Currency, which believed PNC's 2001 transfer of $762 million in troubled assets off its balance sheet improperly inflated its profits by $155 million. The settlement did not involve monetary fines.
Federal regulators accused PNC, with the approval of its auditors, of illegally transferring the troubled loans and venture capital investments to three companies it formed with AIG.
A spokesman for PNC (PNC: Research, Estimates) said the Pittsburgh-based banking company had no comment on the AIG statement.
AIG (AIG: down $0.30 to $70.94, Research, Estimates), a component of the Dow Jones industrial average, closed down 0.4 percent on the New York Stock Exchange.
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