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FBN’s Charlie Gasparino on the potential fallout from former AIG CEO Hank Greenberg’s challenge to the Martin Act.
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Or is this just sit and is it appeals court opt outs are ruled the very thing that landed this guy behind bars.
Was unfair it is way too early to tell but this much we did say a guy named Hank Greenberg might might might lay waste to it.
Because we're just getting word that the very mar -- that was allowed and has allowed attorneys general.
To chase down suspected financial -- oftentimes are nothing more than aren't.
Could be on the verge of being dressed there's no less that former -- -- -- Hank Greenberg has just one himself.
An appellate court hearing.
On the use of some of the global -- act and whether New York.
Attorney general and later governor Eliot Spitzer went too far going after CEOs who might have done nothing wrong.
Charlie Gasparino spins -- enjoys his house.
It literally say what -- negatives.
Writing about it for many years I mean let's back up exactly with the -- -- is it's called the blue sky -- it essentially gives.
It's it's it's of New York State law and -- kind of circumvent federal the federal laws or just goes above the federal laws.
-- -- in New York State attorney general can go with the securities fraud cases go through all these cases that are generally handled by the -- -- by the way.
I that the New York State attorney general has a law -- bar.
To bring a case of fraud against people like Kozlowski or Dick Grasso member he was he got -- of editors bring it forward just on the -- hunch.
You can you can you can without U member -- -- cases are based on something known as intend to proceed enter or intent.
I think -- indeed in -- act cases you can show sort of conflicts of interest.
You know confluence is a factor is not necessarily that legal barrier had a very plant seeds -- -- -- another might not be criminal at all yep and you could show that these sort of undisclosed conflicts of interest like you know you're selling securities and your height being on the yet paid by the affirms that that just in of itself without.
Proving that there was intent by any of the parties just or those confluence is a bit of of things.
That that is essentially fraud on the Martin -- its very let's say the -- act is this hearing about.
Throwing out tomorrow now here's I think we should point out the the New York State Court of Appeals is like that the Supreme Court New York stated rules on.
The judgment of these things -- it's essentially gonna say if this court rules and Hank Greenberg's favorite he member he was brought up the when he got thrown out of AIG.
The New York State attorney general through a lot of charges out of to have stuck -- still -- still fighting those two.
They're Martin -- cases if they throw out those two.
They're gonna throw down on the grounds that as Hank Greenberg's lawyers arguing.
Federal law pre ends the Martin -- guess what federal law has a higher standard of intent the feds haven't charged him on these very issues.
That will be a pretty big sort of knock on the -- act because it would Hank Greenberg stand.
As a result of of such as well -- he would candidate for him personally yeah he would be he would be exonerated but the bigger things not just Hank.
The bigger thing that the Martin act would have a key sort of precedent against it and what every Wall Street firm has said for years.
Is -- killing us with this morning act that allows -- New York State attending general just turned the screws on us on almost anything forces to pay billions of dollars in fines.
Where the feds won't bring a case because the feds don't believe don't that though is that oftentimes Charlie build the case beyond.
With a Martin act originally triggered so the Fed charges do still Stan announced that they apply sometimes -- -- sometimes it out member of Martin act is a lower bar for intent.
And if you could bring them on a Martin -- could squeeze people a lot harder on a -- -- I really believe that Eliot Spitzer was involved in the joint settlement involving research back in 2000 and to 2003 where I think people the world Wall Street firms chip didn't pay over well over a billion dollars if he wasn't involved.
That that money that finally did a lot less because the charges would have been a lot let's do it tomorrow and that there'd be no Eliot Spitzer.
Moving on to governor probably -- an event that's gets a little more probable given that because it's basically.
It's a guy who brought is that you know Spitzer noted know anything about the -- -- before.
Erica knows one of his assistant attorney generals went to -- -- Morgan -- office which as you know prosecuted Kozlowski but going forward is where this is big.
That's Libor case one of the biggest liabilities -- all the bank's -- face in the Libor manipulation case.
Is that the states are now involved and they -- -- bar to bring -- charges it's pretty this is pretty juicy stuff.
But -- ways away I think I don't think this thing's gonna get you know finish for another year.
And member New York State -- quarter appeals has upheld the Martin act in the past who could.
-- -- -- What did I needed to notices -- -- Gasparino who can explain is -- -- is that.
Thank you joining us for in --
