AIG Is Even Worse Off Than You Think

[formercia]

http://finance.yahoo.com/techticker/article/293586/AIG-Is-Even-Worse-Off-Than-You-Think


Posted Jul 31, 2009 02:19pm EDT by John Carney in Investing, Recession, Banking


From The Business Insider, July 31, 2009:

Remember the fairy tale about AIG being an otherwise healthy insurance company that just got a little crazy selling credit default swaps? Well, it's time to put that one to rest.

The New York Times has reviewed state regulatory filings and discovered that "AIG's individual insurance companies have been doing an unusual volume of business with each other for many years — investing in each other’s stocks; borrowing from each other’s investment portfolios; and guaranteeing each other’s insurance policies, even when they have lacked the means to make good. Insurance examiners working for the states have occasionally flagged these activities, to little effect."

"More ominously, many of A.I.G.’s insurance companies have reduced their own exposure by sending their risks to other companies, often under the same A.I.G. umbrella," the NYT reports.

Regulators have been turning a blind eye to this sort of thing because they are worried about putting the taxpayer investment in AIG at risk.

Read that again: we invested billions in AIG and now we can't properly regulate it without putting that investment at risk. It's a brand new type of regulatory capture. Great work, team.

[no_hypocrisy]

1. I know someone who's an executive at AIG in Bermuda. She's still

getting bonuses. She purposely chose to miss her grandmother's funeral in order to get a contract to get a bonus two months ago.

[formercia]

2. Greed

What can I say?

[Hugin]

3. K&R

[UpInArms]

4. The Greenberg family is based

on greed, corruption and malfeasance.

I've known of them and their ilk since the 80s.

they stink

[formercia]

5. Business as usual...

http://jurist.law.pitt.edu/paperchase/2006/02/insurance-giant-aig-settles-fraud-case.php

Thursday, February 09, 2006

Insurance giant AIG settles fraud case for $1.6 billion
James M Yoch Jr at 1:24 PM ET

American International Group (AIG) , one of the world's largest insurance companies, has agreed to pay $1.64 billion to settle fraud, bid-rigging and improper accounting charges, New York Attorney General Eliot Spitzer announced on Thursday. The settlement, which does not include former chairman and CEO Maurice "Hank" Greenberg , ends civil litigation against the insurance company filed by the New York Attorney General's Office, the New York State Insurance Department and the US Department of Justice , and will distribute money to investors, policyholders, and other injured states as well as the named plaintiffs.

As part of the pact, the US Securities and Exchange Commission also settled with AIG for $800 million. The charges alleged that AIG made multi-million dollar transactions with Gen Re insurance group, a subsidiary of Berkshire Hathaway , to improve the company's appearance of profitability. AP has more.