NEW YORK (Bloomberg) — American International Group Inc. was sued for securities fraud by former chief executive officer Maurice (Hank) Greenberg.

Greenberg sued yesterday in federal court in Manhattan, saying the company's "material misrepresentations and omissions" caused him to acquire New York-based AIG shares in his deferred compensation profit-participation plan at an "artificially inflated price".

The complaint comes on the same day that AIG CEO Edward Liddy told Bloomberg News that Greenberg was at the helm during the formation of AIG's financial products unit, which sold derivatives that cost the company more than $30 billion in write-downs and prompted a government rescue. After reporting its fourth-quarter loss widened to $61.7 billion, AIG announced it reached an agreement to restructure its federal bailout.

AIG's alleged misrepresentations caused Greenberg to pay excessive income tax on the AIG shares, according to his complaint. Greenberg seeks to recover the difference between the price he paid for the shares and a fair price had the misrepresentations not occurred, according to the suit. Christina Pretto, an AIG spokeswoman, said Greenberg's lawsuit is without merit and that AIG will defend itself.

Greenberg said in a television interview yesterday that the plummeting share price of AIG had cost him around $2 billion.