Greenberg's legal defense team, headed by litigator David Boies, issued a statement "denying any fraudulent conduct" by Greenberg. Greenberg was traveling and unavailable for comment.

AIG spokesman Joe Norton issued a statement saying the insurer is cooperating with the attorney general's office and anticipates being able to reach a settlement.

Separately, the AIG board is about to disclose the results of an investigation by an outside law firm, perhaps as early as today. In March, the board's interim report identified accounting errors and improprieties that are expected to reduce the company's net worth by about $2.7 billion when it files its long-delayed annual report next week with the Securities and Exchange Commission.

Among the allegations contained in the attorney general's complaint:

• AIG engaged in "sham" insurance transactions with Berkshire Hathaway subsidiary General Reinsurance and others involving hundreds of millions of dollars to produce the impression that it had a larger cushion of reserves to pay claims than it actually did.

• Former CFO Howard Smith allegedly ordered "top line" adjustments to the company's financial statements each quarter to help it meet Wall Street analysts' expectations. Those adjustments were entered in the company's financial statements with no factual basis, according to the lawsuit. AIG already has said such adjustments totaling $100 million will be reversed. Smith's attorney, Andrew Lawler, says his client "looks forward to the opportunity to answer and refute the allegations in court."

• AIG illegally disguised more than $200 million in losses on a failed auto-warranty business through an offshore company it controlled. USA Today first revealed the losses in an investigative report last year.

In February, four days after AIG received a subpoena from the attorney general's office that should have set off alarms, Greenberg placed a call from his private jet.

AIG's stock price was falling, and Greenberg, whose net worth shifted by $65 million for every dollar change in the stock's value, was unhappy, New York Attorney General Eliot Spitzer's office alleges.

The CEO allegedly urged an AIG trader to buy company shares for its own account, putting upward pressure on the share price, the attorney general's office says.

"If you have to go up to half a million shares, go up to half a million shares," Greenberg said, according to a tape recording of the conversation obtained by the attorney general's office. Greenberg called back once more, as the market was closing and after the legal cutoff had passed for companies who buy their shares for their own account.