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    Repiglican Roast

    A spirited discussion of public policy and current issues

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    Location: The mouth of being

    I'm furious about my squandered nation.

    Thursday, September 25, 2008

    AIG who Already got their 85 billion dollar bailout, under investigation for fraud since March. Only since March?

    [...]
    As with the 25 other ongoing FBI inquiries involving the mortgage debacle, the main focus of interest is whether companies and their executives misled investors and auditors when they put a value on their mortgage-related investments.

    On Feb. 28, AIG posted its largest quarterly loss ever, blaming complex financial instruments known as derivatives for write-downs of more than $11 billion. Martin J. Sullivan, the insurer's chief executive at the time, resigned in June after AIG suffered another multibillion-dollar quarterly loss on its derivatives connected to defaulting home mortgages.

    The company's near-death is largely being blamed on its heavy involvement in a kind of unregulated derivative called credit default swaps, whereby AIG earned hefty premiums in exchange for guaranteeing another company's mortgage investments if the mortgages defaulted. AIG bet that many of the mortgages would never fail, but an unusually high percentage did.

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