SEC Backs Off AIG, Executives

NU Online News Service, June 17, 12:15 p.m. EDT

The U.S. Securities and Exchange Commission has ended its investigation of American International Group Inc. (AIG) and Joseph Cassano, former head of the company's Financial Products unit.

No charges were filed.

"We are pleased that the commission, like [the U.S. Department of Justice], has decided to close its inquiry, which is completely appropriate in light of the facts," said F. Joseph Warin and Jim Walden, attorneys for Mr. Cassano from the firm Gibson Dunn & Crutcher.

The DOJ closed its investigation last month without filing charges.

"We think they realized that our client acted in good faith, kept his superiors informed, and was honest with investors," the attorneys added.

AIG said it continues "to cooperate with other authorities on their assessment of these events as we focus on strengthening our businesses and repaying America's taxpayers."

Mr. Cassano left AIG in March 2008. Authorities probed the former executive to determine if he and other AIG executives misled investors.

AIG's Financial Products unit, with its dealings in credit default swaps, was at the center of the company's near collapse--which led to the federal government making $182.3 billion available via the Troubled Asset Relief Program to bail out the massive company. AIG said it owed the government $101.6 billion as of March 31.

A recent Congressional Oversight Panel report questioned whether the government will ever get all its money back. The bailout has distorted the marketplace and poses an "extraordinary risk to taxpayers," the report states.

Federal Reserve Board Chairman Ben Bernanke recently told legislators he believes AIG will repay the government.

At a shareholders meeting last month, AIG President and Chief Executive Officer Robert Benmosche said the company remains committed to repaying its debt to the federal government.


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