AIG execs won't face criminal charges

[imurhuckleberry]

Source: WSJ

Federal prosecutors will not bring criminal charges against current and former American International Group Inc. executives for their role surrounding financial contracts that nearly brought down the insurer about two years ago, according to people familiar with the matter.

The decision brings to a close a criminal investigation that, while mostly under wraps, was widely followed. The September 2008 bailout of AIG was one of the biggest and most shocking of the financial crisis, as trading by a noninsurance unit brought down one of the most iconic financial companies world-wide.

The probe focused on Joseph Cassano, who headed a London-based unit of AIG called Financial Products, people familiar with the matter have said. Other executives at the unit, Andrew Forster and Tom Athan, also were targets of the investigation, these people said.

"The system worked," said lawyers F. Joseph Warin and Jim Walden of Gibson, Dunn & Crutcher LLP, who represent Mr. Cassano, in a statement on Friday. "The large group of federal agents and prosecutors was diligent and professional throughout the investigation, and our client is grateful that they did their jobs by following the facts to the end."

Read more: http://online.wsj.com/article/SB10001424052748704852004575259240428335282.html?mod%3Drss_whats_news_us

[gateley]

1. My heart just sank. Go enjoy your bonuses, assholes. nt

[radhika]

43. Not even the dreaded 'sternly worded letter'? n/t

[saigon68]

95. ERIC HOLDER =

[No Elephants]

105. This decision was above Holder's pay grade.

[RBitt]

75. FDR said it all,Clinton undid it all, Obama is taking it to the next level.

"We had to struggle with the old enemies of peace‹business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.
They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.
Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me‹and I welcome their hatred. " 10-31-36 FDR

Obama speaks of
' our friends on Wall Street.' what an a-hole.

[avaistheone1]

89. +100

[ima_sinnic]

102. +101

he was bought and paid for a while ago

[rsmith6621]

2. Face It Folks......

....The Tree Will Never Be Shaken Under Obama....Corporate America Has Spare Get Out Of Jail Free Cards...

[Vinnie From Indy]

3. The system worked!

Rich people cause unimaginable damage worldwide and go free to sit on their yachts and poor people get caught with some weed and spend years in prison. Is that the system this douchebag's lawyer is applauding?

[saigon68]

94. Disgusting Criminals

[Lerkfish]

4. I never thought they would

no one ever faces charges, when their buddies are in charge of pressing charges... whether its in some backwater village or the US govt.

[charlesg]

5. Well, isn't that special

[Angry Dragon]

6. Bull.......

[xchrom]

7. Quelle shock and awe, quelle hope and change. Nt

[davidwparker]

25. His butt will be gone after 2012.

I can see Two Men and a Truck parked outside the WH now.

[movonne]

36. And then we get a repug and it will get worse...it is like being

in between a rock and a hard place...what to do, what to do..

[chrisa]

57. We cannot accept the lesser of two evils and sulk forever.

It's obvious that the Obama Administration has no intention of regulating business any more. They especially won't prosecute anybody in AIG. Those on Wall Street can commit any financial crime or fraud that they want, and get away with it at this point. We need an Administration that is willing to fight back against corporate raiders, not an Administration that will suck up to them.

(Also, prepare for no prosecution of anyone in BP, and the scolding of the American people for even thinking to ask for such a thing. The American people will suffer and pay the bill, while BP posts record profits).

[deconstruct911]

66. It's easy to get away with fraud

When you own a private cia.

[northernlights]

67. at least with the rethug, we know we are about to get effed

and don't waste precious time and energy on (false) hope and (no) change.

Seriously. If McLame/Failin had "won" (or successfully stolen) the election, I would have dumped my home at rock-bottom price to some a-hole freeper who believed they'd save the economy, headed further into the wilds and saved myself a lot of wasted effort.

Instead, thanks to (false) hope, worked my ass off for 2+ years in a med lab tech program with no way to finish it now that my student loans are unexpectedly cut off, owe up $20K+ in student debt with no way to repay it because I can't finish the program, can't sell my home to save my life even at a rock-bottom price, got denied "low income property tax rebate" by state because I failed to prove I qualified (out of work for a year so ZERO INCOME THAT YEAR -- lived off the last of my retirement fund), and am caught between the proverbial rock and hard place.

At this point, for me, it doesn't matter who "wins" or "loses" in 2012. If I even survive that long. :(

[Lorien]

82. it's time to find other options

third party, true Dem challengers, anything. The two party system is DONE!

[No Elephants]

107. Other alternative: Primary. Unlikely, but not impossible.

[Iowa]

78. Yep. Worst Democratic president in history. The antithesis of FDR...

Grayson 2012.

[Lorien]

83. I like that idea! nt

[ima_sinnic]

103. I do too!

Grayson 2012 could definitely work for me.

[calico1]

8. What a disappointment.

Same old, same old. Nothing changes.

[BumRushDaShow]

9. The true criminals reside in Goldman Sachs.

Recall that the billions and billions of taxpayer money that went to save AIG were funneled right back out to Goldman Sachs. I would not be surprised if there were immunity agreements being worked to get at the real source of the world-wide financial collapse - Goldman Sachs. Now whether they can or will persist on taking GS down is another issue altogether.

[dotymed]

27. What a HUGE surprise.

Obamas whitehouse is teeming with GS exec's. I am positive they will be b(r)ought to "justice."
Meet the old boss.....same as the old boss....

:nuke:

[laughingliberal]

42. One ray of hope. eom

[northernlights]

68. seriously? you honestly believe that Obama will go after Geithner?

his *family friend* who's father employed his mother way back when?

Uh-huh. Sure. Yup. Any day now.

[Beacool]

80. Bingo!!! Give the lady a prize.

AIG was saved for the sole purpose of channeling money through them to Goldman Sachs and over 80 other financial institutions worldwide.

Goldman Sachs made billions by pushing AIG to bankruptcy

By Barry Grey
10 February 2010

An investigative report published Sunday by the New York Times provides a glimpse of the predatory practices of major Wall Street banks that played a central role in the financial meltdown and global economic crisis.

The article, headlined “Testy Conflict With Goldman Helped Push AIG to Precipice,” documents the role of Goldman Sachs, the biggest and most profitable US investment bank, in pushing the insurance giant American International Group (AIG) to the brink of bankruptcy.

-------

The Times article, by Gretchen Morgenson and Louise Story, is based on a review of internal AIG documents and a recording of a January 28, 2008 conference call between Goldman Sachs executives and AIG. It describes how Goldman, in the two years preceding AIG’s bailout, worked to undermine investor confidence in the insurer, then the biggest seller of credit default swap contracts, and drive down the market value of mortgage-backed securities.

During this period, Goldman was betting on a collapse of the housing bubble, which it had helped inflate by promoting sub-prime mortgages. Even as Goldman’s top traders were structuring credit default contracts with AIG on mortgage-backed securities in a manner that enabled the bank to profit from a decline in the price of these securities, Goldman was making money by purchasing the same type of securities for clients and charging fees for bundling home loans into so-called “collateralized debt obligations” and selling the mortgage-backed CDOs into the market.

http://www.wsws.org/articles/2010/feb2010/gold-f10.shtml

x(

[No Elephants]

110. GS is only one of several places in which the true criminals reside.

[RKP5637]

10. This is USA, Inc. Why would anyone expect different... citizens are an inconvenience

to the profit objective. And the gov. is bought and paid for by corporations.

[primavera]

88. Exactly

The executive enforces law; it doesn't create it. And our laws have been written by corporations for generations to ensure that the rich get richer at everyone else's expense with impunity.

[No Elephants]

108. Like Bushco, AIG did plenty for which it could have been prosecuted under existing law, but the Exec

decides whom to prosecute and whom not to prosecute.

[FailureToCommunicate]

11. "...prosecutors were diligent and professional throughout" They're SO gracious in victory.

Terrible -but predictable- outcome.

[tularetom]

12. Did anyone really expect they would?

The asshole who started two illegitimate wars and is probably as responsible as anyone for the Gulf oil clusterfuck is still free and hiding in his undisclosed location. His stooge is running around the country giving "motivational speeches" for big bucks. In the face of overwhelming evidence they haven't yet been charged with war crimes. I can almost guarantee they never will.

Nobody with money and/or connections is ever going to be charged with anything in this country.

[bulloney]

13. I think we need to see an angry mob assemble around the homes of these crooks.

[snagglepuss]

14. Exactly. nt

[stillwaiting]

38. The police would protect the crooks and probably harm/arrest the protestors.

We need to change the system.

"Better candidates" just won't do it.

I hope a movement starts soon that ONLY focuses on changing the system that includes conservatives AND liberals.

[Jackpine Radical]

39. And if the police aren't enough, the rich have the National Guard

to back them. Tienanminh Square won't work here because the tanks won't stop.

[No Elephants]

104. Sounds like what the Tea Party wants to acomplish, Fat chance.

[Initech]

53. Like they said on the Simpsons: There's no justice like angry mob justice.

[Hubert Flottz]

15. If Joe Six Pack stole a thousand dollars and got caught he'd do a couple of years.

A guy stealing to feed his kids goes to jail...these mother fuckers get a bonus!

[City Lights]

16. Too big to prosecute, eh?

x(

[chill_wind]

17. Oh yes. The system worked.

The way it almost always does for the very rich, the privileged, and most white collar criminals.

[naaman fletcher]

18. They probably did nothing criminal..

Basically CDS contracts are insurance contracts. AIG simply wrote a whole bunch of insurance contracts that they never thought they would have to pay out on. Those buying the contracts, like Goldman and such, knew damn well that AIG could never pay if a large group of claims came in.

But, Goldman didn't have to worry because Goldman and the Government are one-and-the-same, so Goldman just had the Government lend AIG money in order to pay off the contracts.

The system stinks, but really it's Goldman, Citi, Hank Paulson, Geithner, Bush, Obama, and about 20 key Senators and Congressmen who belong in jail. I am willing to buy that Obama wasn't really a part of the inside workings of it, but certainly some people he trusted were at least.

[icee]

20. I would bet that he was part of it.

[Dinger]

22. Whoa, You're Braver Than I Am

And I agree with you.

[AlbertCat]

23. AIG simply wrote a whole bunch of insurance contracts that they never thought they would have to pa

AIG simply wrote a whole bunch of insurance contracts that they never thought they would have to pay out on.


***********

It's not criminal to write agreements to pay out something you don't have the means to pay out in the 1st place? Sounds like fraud to me.... simply.

[naaman fletcher]

32. maybe...

It was always common in insurance, which is why insurance is heavily regulated. Is this? Maybe. But I will say that the people who bought the insurance were perfectly aware of AIG's financial situation, so probably none of the purchasers were being mislead. Everybody was in it to get rich quick and hope that the bubble never ended.

[SOS]

48. They renamed their insurance as credit default swaps

with the purpose of evading insurance regulations with their pesky capital requirements.
It was deception and evasion from square one.

They knew they could never pay if the mortgage market tanked and deliberately evaded regulation.

The defender of AIG above seems to think these contracts were legally defined as "insurance" which they were not.

[liberation]

72. Fraud by definition is a CRIME

Maybe I did not get the sarcasm?

[proudohioan]

85. Yeah, it sound like something that would land me in Mansfield if I tried it! nt

[chrisa]

58. They can do nothing criminal when the government decriminalizes what was illegal in the past.

Prepare for more deregulation, all in the interest of our "economy" (eg. so that the rich can accumulate more wealth than they need).

By the way, I'm watching my neighbor move out right now after being foreclosed. He has two little girls. Sleep well, Wall Street execs. Enjoy that Lobster and Filet Mignon dinner you have tonight made by the finest of chefs. The government is the greatest friend you could ever have.

[No Elephants]

112. Pls see Reply # 109.

[ooglymoogly]

64. There is a little thing called RICO.

[mbperrin]

92. CDS contracts are gambling, not insurance. To qualify as insurance,

the owner of the contract would have to have an actual insurable interest in the thing being insured.

Example: Insurance is when the company would suffer greatly from the death of an officer because of their unique skills or knowledge. The company purchases life insurance in the amount of expected loss from that death. Action and consequence clearly related, and my insurable interest is easy to define and monetize.

Gambling: I go to the track and buy a $2 ticket to win on Faster Than You. I don't own the horse, I don't train the horse, I do nothing but show up, spend $2 and wait for riches to follow. That's gambling. And that's CDS, just with some extra steps thrown in to confuse the gullible.

Whole mess should be outlawed. And please don't talk about reducing risk. Insurance of any kind is a moral hazard, because it does not reduce risk, it pays off when risk is realized, rewarding risk. Reducing risk is not buying auto insurance that will pay off when I hit someone else while speeding and texting. Reducing risk is eliminating speeding and texting, because if I have a wreck, the person I hit will take my house, bank accounts, and future labor of my children.

[No Elephants]

109. At a bare minimum, AIG violated securities laws requiring full and fair disclosure, Hell, even Ben

Stein says AIG (and others) broke the law big time.

[scentopine]

19. LOL! Was there any doubt that we would "look forward" ? -nt

[asdjrocky]

21. Yet people go to jail everyday for stealing food

or smoking pot.

Land of the free? If you can afford it.

[laughingliberal]

44. +1000 nt

[davidwparker]

24. Is this change I can believe in?

No. You'd think the Hope Monger's prosecutors could find "fraud with both hands" here.

[slay]

26. The rich get to play by a whole different set of rules

almost destroy an economy = nothing. Sell, or even in some states just smoke some marijuana = go to jail + fine. It's the people vs the mega corporations now. The battle lines couldn't be clearer.

[Jackpine Radical]

46. Not true, not true at all.

The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread. (Anatole France)

On the other hand, the law permits the poor, as well as the rich, to buy politicians, hire fancy lawyers, and generally wreak havoc on the economy with market manipulations.

[conspirator]

117. +1

[Selatius]

28. There would be a national strike and daily protests if this occurred in a functioning Republic.

A population unafraid of using critical thinking and well-informed is far more powerful than a population anesthetized with infotainment and outright propaganda.

[No Elephants]

111. +1

[lovuian]

29. they get away with it and walk for now

but when this government is gone
they will be found

it is matter of time

I have no confidence in this government
the Corruption is worst

this is under the OBAMA Department of Justice

[cornermouse]

30. I beat your with the story by more than 2 hours.

Have a nice day.

[BulletproofLandshark]

35. Your No-Prize is in the mail.

http://en.wikipedia.org/wiki/No_prize

[DesertDiamond]

31. Quelle surprise.

[rurallib]

33. Remember FDR's 'They hate me and I welcome their hate' speech

I dont think we will ever hear Obama give that one.

[tomm2thumbs]

40. +1

[laughingliberal]

47. I don't think so, either. nt

[liberation]

73. I can see the "You love me, you really really really love me" Oscar speech though...

Oh, well.

[nightrain]

34. no big surprise. Obama is unwilling to make people responsible for their actions.

[Mike K]

41. Small correction:

Obama will make some people responsible for their actions.

E.g. Obama's drug czar, Gil Kerlikowske, who is every bit as subtly devious as Obama is, has proposed that anyone found to be driving a motor vehicle with traces of THC in their urine, will be charged with DUI. And as we all know, one could smoke a joint at a week-end party on May 1, and not again, and be tested on June 1 and be considered by the law to be guilty of DUI.

And this under the ultimate auspices of a President who has admitted to smoking pot "frequently."

I am curious to know how many DU participants continue to believe that Obama is anything but a phony corporate puppet?

[Phlem]

37. Whoa

For a second there I thought Bush was still president. Huh, I must not be prejudice because the two different colors faded away and all I saw was the same asshole.

-p

[HughBeaumont]

45. Corporate America: The Legal Mafia.

They won't stop until we stop them. And that will never happen; we're afraid of arrest and one arrest will ruin our lives for good.

As much as your friendly policemen and military SAY "we'd never murder our neighbors" . . . I'll bet, if put to the test, they WOULD side with and protect the criminal rich from the torches and pitchforks.

[Vinca]

49. It's just amazing. A person with no money can steal a steak

from the grocery store and go to jail. Guess the lesson is "steal big."

[go west young man]

50. America the beautiful? My ass. More like america the banana republic.

[No Elephants]

113. Rev. Jeremiah Wright, is that you?

j/k

[Kall]

51. Surprise, surprise.

Plus ca change...

[Initech]

52. I'll go get my pitchfork.

[Scruffy1]

56. I'll stock up on tar. Anyone got feathers?

[northernlights]

69. I've got the feathers. Anybody got a match? nt

[LiberalLovinLug]

54. Well...

SURPRISE SURPRISE SURPRISE!

[tinymontgomery]

55. Can there be civil charges brought against them?

[rocktivity]

59. Well, they DIDN'T do anything illegal.

They just did things that USED to be illegal before they paid Congress to MAKE them legal.

The real solution is to make those things illegal again!

:headbang:
rocktivity

[femrap]

60. Gee, I know

how the Greeks must be feeling with regard to corruption.

I wonder if we'll get a 'riot dog,' too.

[Heywood J]

61. Give the corporations the chair.

[HCE SuiGeneris]

62. Too Big To Jail

:grr:

[FlyByNight]

63. Can't say I'm surprised

There is definitely an inverse relationship regarding wealth vs. accountability: more wealth equals less accountability. Sadly, it's not very different at all with Dem administrations.

I love change.

:eyes:

[lynne]

65. Appears the contracts were ironclad. IMO, the contracts should have been -

- renegotiated PRIOR to any bail-out and the bailout should have been contingent upon renegotiation. Only then would this not have occurred.

[mbperrin]

93. Always funny how corporate crooks get ironclad contracts while union

workers get their contracts eliminated, get their contracted pensions shuffled off into reduced payout, and more.

Funny, that.

My attorney years ago, brilliant man, told me that contracts are always a convenient place to start talking about what's actually going to happen. In this case, AIG could not have met the conditions of the contracts, and it is not possible to bind a third party without their permission to perform your contract for you. So no, they weren't ironclad, but they were certainly well-connected, and crooks in suits always make out better than crooks with a little pistol.

Always.

[Trillo]

70. Deja vu. Remember this story.

In a few years, there will be a similar headline with BP replacing AIG.

[Carter Hayes]

71. Old habits die hard

No matter's who's in charge, they can't seem to resist the shitload of money being offered to the admin so the Corporate Mafia can buy their way out.

[AllentownJake]

74. OBAMA! OBAMA! OBAMA! nt.

[Triana]

76. White collar crime PAYS -BIG!

And this will ensure that it continues to. Pfft.

[Blue_Tires]

77. someone needs to photoshop the AIG execs together with the Taliban

at least then they'd never see the light of day again

[Duer 157099]

79. But smoke a joint and you go to fucking prison

Help! I need to get off this planet of insanity!!

[Francisco]

81. Can we sue the government..

and get our tax money back? lol wow I'm speechless...

[Divine Discontent]

84. actually, yeah...

talk about an enormous undertaking, but yes, it can be done. Sadly, the way things are, you question whether or not they'd just throw out the case...

[stuart68]

86. Obama says one thing and does another

Guantanamo Bay, Don't ask, Terrorist trials, on and on and on.

Who'd a thunk it ?

Oh, yeah, let's resurrect that list of accomplishments like Justice Sotomayor (good butcertainly not a difficult accompliahment).

[tango-tee]

87. No surprise here, only disgust.

There are no words...

[laylah]

90. Why am I not surprised? nt

[Doremus]

91. These fvcking 'investigation' charades are a farce.

Do they really think anyone thought they would do the right thing?

It's nauseating.

[ProudDad]

96. Completely Logical

In a corporate state, making money by any means necessary IS the point of the exercise.

These guys were just "doing their job" and pumping up the capitalist Ponzi scheme...

The SYSTEM worked...just as it was designed to do...

This is a document designed to protect white, male, property owners' privilege...it has served its purpose well and continues to do so.
http://www.usconstitution.net/const.html
Too bad we can't have a democracy, hmmm?


Don't like it...change the system; locally: www.transitionus.org

[Ardent15]

97. More Change (TM) we can believe in

nt

[BrklynLiberal]

98. What a disgusting pile of poop!!!!!!!!!!

[classysassy]

99. Well in America

its stil a fact rich crooks go free.

[boppers]

100. Mens Rea

Learn it or suffer a lifetime of confusion about "injustice".

http://en.wikipedia.org/wiki/Mens_rea

[No Elephants]

114. There was mens rea aplenty.

[Steerpike]

101. unfortunately

what they did was legal...from what i understand...will there be reforms? probably only superficial...we are easily disposed of...they $$$$ are not...

[ShortnFiery]

106. Welcome to the United Corporate States of America.

Where "too large to fail" corporations are ALL above the law. :grr: :nuke: :grr:

[No Elephants]

115. Change we can bereave in.

[fascisthunter]

116. this country is fascist... corporations and their rich pigs call the shots

and this admin is bought and sold.