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American International Group, Inc. announced that ÌìÃÀÍøÕ¾´«Ã½´«Ã½ and its subsidiary ÌìÃÀÍøÕ¾´«Ã½´«Ã½ Financial Products Corp. (ÌìÃÀÍøÕ¾´«Ã½´«Ã½FP) have received a “Wells Notice” from the Staff of the Securities and Exchange Commission (SEC).

The notice, a preliminary to the filing of a lawsuit against the companies, informed the recipients that the Staff is considering recommending that the SEC bring a civil action against ÌìÃÀÍøÕ¾´«Ã½´«Ã½ and ÌìÃÀÍøÕ¾´«Ã½´«Ã½FP alleging violations of the federal securities laws.

The investigation centers on ÌìÃÀÍøÕ¾´«Ã½´«Ã½FP’s structuring of three special purpose financial vehicles for the Pittsburgh-based company PNC Financial Services Group, Inc. in 2001. The PNC transactions were the subject of a SEC action against the company in 2002. They were terminated early the next year.

Through the use of the derivative vehicles PNC was reportedly able to transfer some $762 million worth of doubtful loans and investments off its books, and on to ÌìÃÀÍøÕ¾´«Ã½´«Ã½’s. The SEC has charged that the transactions violated accepted accounting principles and enabled PNC to overstate its 2001 earnings.

“ÌìÃÀÍøÕ¾´«Ã½´«Ã½ and ÌìÃÀÍøÕ¾´«Ã½´«Ã½FP believe that the proposed action would be unwarranted and will respond to the Staff,” said the company’s bulletin, but gave no further details.

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