NEW YORK (CNN/Money) -
Regulators are pushing for an independent monitor to scrutinize the American International Groups books, as the insurance company tries to settle an investigation into its business practices, said a newspaper report Wednesday.
New York-based AIG was well on its way to reaching a settlement with the Securities Exchange Commission over a probe into AIG's contract with cell phone distributor Brightpoint Inc., but balked at the idea of a monitor, the New York Times reported.
Citing people briefed on the negotiations, the newspaper said the SEC wanted a monitor with a limited mandate -- to inspect AIG's books to see whether other questionable, income-smoothing contracts had been sold and, if so, to whom.
Negotiations have been renewed, but the outcome is unclear, the newspaper said.
On Oct. 21, AIG disclosed that the SEC had accused it of helping Brightpoint by selling it an insurance policy that did not actually transfer risk and helped the cell phone company conceal $11.9 million in losses.
While installing an independent monitor would not be unprecedented, an authority in securities law told the Times it would be unusual.
"Typically when you settle these matters you want an end to it," Lewis D. Lowenfels with Tolins and Lowenfels told the newspaper. "But with a monitor in there, it is open to further investigation, findings of possible violations and you really can't control where it may lead."
AIG (Research) shares were up 1.68 percent in pre-market electronic trading from their close Tuesday at $61.47 on the New York Stock Exchange.
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