Four former General Re executives and one former AIG executive have won a new trial over an allegedly fraudulent finite reinsurance deal transacted in 2000.

Former General Re CEO Ronald Ferguson, CFO Elizabeth Monrad, Senior VP Christopher Garand and Assistant General Counsel Robert Graham and former AIG reinsurance VP Christian Milton were convicted in 2008 over their part in a finite reinsurance transaction.

At that time US district judge Christopher Droney concluded that the deal had allowed AIG to book $US500 million ($486.4 million) of loss reserves without assuming any real risk.

But the panel of three judges in the US Court of Appeals found Judge Droney erroneously allowed prosecutors to display share price graphs to jurors that was unfairly prejudicial and had improperly instructed the jury on causation.

“The charts suggested that this transaction caused AIG’s shares to plummet 12% during the relevant time period, which is without foundation, and – given the role of AIG in the financial panic – prejudicially cast the defendants as causing an economic downturn that has affected every family in America,” the appeals panel ruled.

The former executives were originally sentenced to between one and four years in prison, but are out on bail pending the appeal.