Wall Street Titan Takes Aim at Law That Tripped Him Up

At 92, Maurice R. Greenberg is not done fighting.

Mr. Greenberg, known as Hank, is a revered figure on Wall Street who built the American International Group into an insurance giant, only to lose it in 2005 amid a securities fraud investigation. He fought the New York attorney general’s office for a dozen years before he agreed to pay $9 million as part of a civil settlement last year.

Despite the settlement, the battle continues. Mr. Greenberg has taken aim at the Martin Act, the sweeping state securities law that was used against him. The far smaller insurer where Mr. Greenberg is serving as chief executive, C.V. Starr & Company, has helped develop, circulate and lobby for new federal legislation that would pre-empt the Martin Act and other state securities laws.

“I care about my country and I care about the rule of law,” Mr. Greenberg, a veteran of World War II and the Korean War, said in a feisty interview this past week. “I fought two wars for my country. This is another war.”

The Martin Act, a 1921 New York securities law that predates the creation of the federal Securities and Exchange Commission, grants sweeping powers exceeding even those of Washington. In addition to bringing the case against Mr. Greenberg, the former New York attorney general Eliot Spitzer used the act to force investment banks to curb abuses related to how analysts overhyped stocks, and challenged Richard A. Grasso, onetime head of the New York Stock Exchange, over his pay.

Although there have been attempts to limit the Martin Act in the past, Mr. Greenberg’s bid is gaining traction. He is working alongside a powerful ally, the U.S. Chamber of Commerce, and has the backing of Wall Street Journal editorial page. And he has had a warm relationship with President Trump.

State securities regulators say that the legislation would gut their powers, even though relatively few executives were held to account following the financial crisis.

“This bill would be terrible for investors all across America,” Eric Schneiderman, the attorney general of New York, said in an interview. “For every Fortune 500 C.E.O. who walks away with a bruised ego, there are dozens and dozens of lower-level scam artists who we put out of business through the state securities laws.

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