U.S. market regulators have closed an investigation of American International Group and some of its executives over the giant insurer’s near collapse in 2008 that led to a $182 billion government bailout, two sources with knowledge of the matter said on Wednesday.
The U.S. Securities and Exchange Commission ended its probe focusing on AIG Financial Products head Joseph Cassano and others several weeks after the U.S. Department of Justice closed its criminal investigation in May.
The parallel criminal and civil probes were among the most high-profile inquiries stemming from the 2008 financial meltdown. Neither criminal prosecutors nor the SEC ever filed charges against AIG or any executives.
AIG said in February that the investigations looked into the valuation of AIGFP’s credit default swap portfolio, the adequacy of risk management around AIG’s exposure to the U.S. residential mortgage market and disclosures.
AIG and lawyers for Cassano welcomed the development. Cassano resigned under pressure in March 2008 as AIG’s financial situation began to weaken.
A spokesman for the SEC declined to comment.
The U.S. government provided $182 billion to avert the bankruptcy of AIG, which wrote tens of billions of dollars on insurance-like contracts on complex securities backed by mortgages that turned out to be toxic.
The criminal probe had focused on whether Cassano, who ran the financial products unit, and Andrew Forster, his deputy, knowingly misled investors about the company’s accounting losses on its credit default swaps portfolio.
“We are pleased that the Commission, like DOJ, has decided to close its inquiry, which is completely appropriate in light of the facts,” Joseph Warin and Jim Walden, attorneys for Cassano, said in a statement. “We think they realized that our client acted in good faith, kept his superiors informed, and was honest with investors.”
An attorney for Forster could not immediately be reached to comment.
AIG said in a statement that it continued “to cooperate with other authorities on their assessment of these events as we focus on strengthening our businesses and repaying America’s taxpayers.”
(Reporting by Grant McCool and Paritosh Bansal; Editing by Phil Berlowitz)
Was this article valuable?
Here are more articles you may enjoy.