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Obama Drops ‘Probe’ Of AIG Executives

From the Wall Street Journal:

AIG Executives Won’t Face Criminal Charges

By AMIR EFRATI

May 22, 2010

Federal prosecutors will not bring criminal charges against current and former American International Group Inc. executives for their role surrounding financial contracts that nearly brought down the insurer about two years ago, according to people familiar with the matter.

The decision brings to a close a criminal investigation that, while mostly under wraps, was widely followed

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

"The system worked," said lawyers F. Joseph Warin and Jim Walden of Gibson, Dunn & Crutcher LLP, who represent Mr. Cassano, in a statement on Friday. "The large group of federal agents and prosecutors was diligent and professional throughout the investigation, and our client is grateful that they did their jobs by following the facts to the end."

David M. Brodsky and Richard Owens of Latham & Watkins LLP, who represented Mr. Forster, said Friday that "the facts were stronger than the emotions surrounding AIG’s problems," and that they knew they could convince prosecutors "that our client at all times acted in good faith." …

The Securities and Exchange Commission hasn’t ruled out bringing a civil-fraud lawsuit for securities violations, people familiar with the matter said.

About 15 government representatives have been involved in the investigation, including prosecutors from the Justice Department’s fraud section in Washington and the U.S. attorney’s office in Brooklyn; lawyers from the Securities and Exchange Commission; and agents from the Federal Bureau of Investigation and the U.S. Postal Inspection Service, people familiar with the matter said

The Justice Department so far has had little success proving there was criminal wrongdoing at financial companies amid the financial crisis. In the first and only securities-fraud case against Wall Street executives in the wake of the credit crisis, two former hedge-fund managers at Bear Stearns were acquitted at trial after being accused of misleading their investors before their funds collapsed.

But efforts continue. Federal prosecutors in Manhattan are currently probing whether any large Wall Street firms misled investors about complex, mortgage-related derivatives, people familiar with the matter have said

Hope springs eternal in the Obama breast.

This article was posted by Steve on Sunday, May 23rd, 2010. Comments are currently closed.

5 Responses to “Obama Drops ‘Probe’ Of AIG Executives”

  1. jackrv says:

    Could this be because the results point back to the Government?

    Nah.

  2. Liberals Demise says:

    Add this to the Black Panthers not getting criminal charges brought against them.
    When are we gonna see the ‘Great Uniter’ do something other than
    “F” up big time?

  3. pamypo says:

    All about the headlines! What will the SEIU do now?

  4. P. Aaron says:

    “Obama Drops ‘Probe’ Of AIG Executives” This means: The check cleared the bank.

  5. wtd says:

    So long as the statute of limitations doesn’t run out before November 2010 – this is but a minor setback. Same with the black panther case. As Palin said, I can see November from my window.


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