Monday, March 30, 2009

FBI Close to Arresting AIG's Cassano?

This should be interesting, and hopefully it will be handled more professionally than the House's knee-jerk 90% tax pandering. According to ABC News, Cassano ran the Financial Products Division of AIG, which is the unit largely blamed for bringing down AIG, and the FBI and federal prosecutors are getting ready to bring charges against him.

I am still having trouble with the concept of an insurance company running a massive financial trading operation, but I guess we have Phil Graham to thank for that. (Is he still whining about whiners? Why haven't we heard from him recently?)

There hasn't been much talk of criminal conduct, but who knows what an FBI investigation will turn up. ABC reports that Cassano said on a conference call in 2007 that the credit defaul swaps were foolproof and that it was hard to imagine that they could even lose a dollar on any of those transactions.

Others say that the swaps were toxic and anyone dealing with them knew they were toxic.

If it happens, it will be an interesting case. But the feds better make sure they are correct however. The last thing we need is a half-assed witch hunt designed to appease the masses which ultimately becomes another hit to the government's credibility.

The Executive Who Brought Down AIG

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