Martin J. Sullivan, CEO of American International Group, has been ousted from the New York-based insurer.
Martin J. Sullivan, chief executive of American International Group Inc., has been ousted from the New York-based insurer.
The embattled chief executive was tossed from the firm’s management and board of directors during a meeting on Sunday, according to published reports.
In Mr. Sullivan’s place, the board of directors appointed Chairman Robert B. Willumstad as the new chief executive, according to an announcement from AIG.
Months of bad news, including plummeting stock prices and regulatory worries about the firm’s accounting, led up to Mr. Sullivan’s departure.
AIG had posted two consecutive quarters of record-level losses — totaling more than $13 billion — related to write-downs on subprime-mortgage-related investments.
The Securities and Exchange Commission has reportedly been investigating the firm for overstating the value of contracts that are linked to subprime mortgages, raising questions about the way AIG valued its credit default swaps.
The Department of Justice is also watching the firm, requesting information about AIG from the SEC.
Dissatisfied major shareholders, including former AIG chief Maurice Greenberg, have called for change in the last couple of months, pointing out the firm’s slumping value.
Mr. Sullivan’s ouster marks the second time in three years a chief executive has been shown the door at AIG.
Three years ago, Mr. Greenberg had been given the boot after regulators and federal prosecutors went after the firm for accounting fraud.
