Legal News

Former GenRe CEO Gets Off With a Mere Two Years

By Dan Slater

Ronald Ferguson, former General Re CEO, leaves U.S. District Court in Hartford, Conn., after a pre-sentencing hearing, Sept. 25, 2008. (AP/Bob Child)

Should Ron Ferguson, the former CEO of reinsurer GenRe, be pleased? Today, Ferguson was sentenced to two years in prison and ordered to pay a $200,000 fine for his role in a scheme that cost shareholders of AIG more than $544 million. Here’s the early AP report.

We don’t imagine two years was what prosecutors had in mind when they asked federal judge Christopher Droney for a “substantial” sentence. At a September hearing, prosecutors reportedly argued that such a huge loss calls for life in prison. Ferguson was convicted in February of conspiracy, securities fraud, mail fraud and making false statements to the Securities and Exchange Commission. Three other Gen Re executives and an official from AIG were also convicted, but have not been sentenced.

Ferguson was repped by Cadwalader’s Michael Horowitz, who reportedly requested leniency, citing Ferguson’s age and plans to become an ordained minister. He reportedly said: “This is a man who is totally devoid of pretension, completely unassuming . . . to compare this event to the largest, most serious frauds of our time would really miss the mark.”

Last month we noted that Ferguson picked up some major firepower for his appeal. Fresh from his victory in the KPMG tax shelter appeal and buzz about being on a short list of possible SCOTUS nominees under President-Elect Obama, WilmerHale’s Seth “Appellate” Waxman plans to file 2nd circuit briefs probably next year.

Full post as published by Law Blog - WSJ.com on December 16, 2008 (boomark / email).