AIG execs won’t face US criminal charges

NEW YORK - US federal prosecutors will not charge executives of American International Group Inc over credit default swaps, the Wall Street Journal reported on Friday.

By (Reuters)

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Published: Sat 22 May 2010, 5:13 PM

Last updated: Mon 6 Apr 2015, 11:09 AM

The decision not to prosecute the executives concludes a two-year investigation by the Department of Justice, according to the report, which cited people familar with the matter.

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

An AIG spokeswoman was not immediately available for comment, nor was the media office of the Justice Department.

AIG Financial Products nearly brought down AIG in September 2008 after writing tens of billions of dollars worth of insurance-like contracts on complex securities-backed mortgages that turned out to be toxic.

The US government stepped in with a $182 billion bailout to avert a bankruptcy filing by AIG and stave off an even worse global financial crisis. Cassano resigned under pressure in March 2008, as AIG’s financial situation began to weaken.

Over the course of the next year, AIG took writedowns of more than $40 billion on the swaps and had to put up billions more in collateral to counterparties.

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