New York Reopens Probe of AIG’s Cassano

July 26, 2010

New York State Attorney General Andrew Cuomo reopened his investigation into former American International Group Inc. executive Joseph Cassano after U.S. authorities ended their own probes, Bloomberg reported, citing a person familiar with the matter.

Cuomo’s office met with Cassano’s lawyers and AIG earlier this month and will likely hold additional meetings, Bloomberg reported, citing the person.

Cassano is the former head of AIG’s London-based Financial Products Division, which nearly crippled the insurer during the financial crisis by making derivative bets on subprime loans. He left several months before AIG got a $182 billion taxpayer bailout in September 2008.

Cuomo halted his 2008 investigation of Cassano after federal authorities began probes of their own. But last month, the U.S. Securities and Exchange Commission ended its probe into Cassano and in May, the U.S. Department of Justice closed its criminal investigation.

Cuomo, who is the front-runner in this year’s race for New York governor, wants to make an independent assessment of whether Cassano bears any civil liability for his conduct at AIG, Bloomberg reported, citing the person familiar.

The U.S. government’s criminal probe had focused on whether Cassano knowingly misled investors about the company’s accounting losses on its credit default swap portfolio.

A lawyer for Cassano and a spokesman for AIG both declined to comment about the report. A spokesman for Cuomo did not immediately return a call seeking comment.

(Reporting by Phil Wahba; editing by Carol Bishopric)

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