New York Attorney-General Eliot Spitzer won’t be pressing criminal charges against former AIG Chairman and CEO Maurice “Hank” Greenberg, despite media reports yesterday that charges were being prepared.

Last night Mr Spitzer’s office said the civil case against Mr Greenberg, 80, and AIG is in train. The lawsuit will allege Mr Greenberg and AIG used financial reinsurance to mislead regulators and investors about the company’s true financial performance.

Mr Spitzer said in April that he would not prosecute AIG because the company’s board was co-operating. But he said at the time that he was still considering what to do about Mr Greenberg.

The lawsuit against Mr Greenberg will allege he repeatedly ordered managers to break accounting rules and that AIG used financial reinsurance transactions to falsely inflate the size of its reserves for claims and hide car warranty insurance losses.