U.S. Modifying AIG Aid to Recoup Financial Products Unit Bonuses

March 17, 2009

The U.S. Treasury will modify a planned $30 billion capital infusion for American International Group to try to recoup hundreds of millions of dollars in controversial bonuses paid by the insurer, a Treasury official said on Monday.

The Treasury is finalizing the terms of its latest rescue package for AIG, announced on March 2, and will attach new provisions to it, the official said.

The company was due to pay $165 million in employee retention bonuses by Sunday to employees of AIG Financial Products, the unit that made bad bets on toxic mortgages and credit default swaps.

The official, who spoke on condition of anonymity, said the Treasury was considering several repayment arrangements aimed at giving the money back to taxpayers.

(Reporting by David Lawder; Editing by Leslie Adler)

Was this article valuable?

Here are more articles you may enjoy.