AIG Under Investigation for Fraud

Rogue executive in a rogue company.

Tainting the purity of Wall Street insiders most likely.

Looks like AIG might have to take a hit for the team.


Ex-AIG exec under probe by U.S. prosecutors
Wed Nov 26, 2008 1:35am EST

NEW YORK (Reuters) - Former American International Group Inc executive Joseph Cassano is under investigation by U.S. prosecutors for possibly misleading auditors and investors about subprime mortgage-related losses, according to a Bloomberg report citing people familiar with the probe.

The report said investigators are asking auditors at PricewaterhouseCoopers about memos they wrote last fall on how Cassano and other AIG executives valued contracts protecting $62 billion in mortgage-backed securities.

The U.S. government is also investigating AIG's reliance on valuations that have been questioned by auditors and banks, according to the report.

Cassano previously led AIG Financial Products, the source of billions of dollars of losses which led to the insurance company needing to be rescued by the U.S. government in a $85 billion deal in September.

In October, U.S. lawmakers criticized AIG for giving Cassano a $1 million-a-month consulting contract after he retired in March.