In A.I.G. Case, Surprise Ruling That Could End All Bailouts

For years, critics of the bailouts during the financial crisis argued that the rescue efforts weren’t harsh enough. The chief executives of failing institutions should have lost their jobs. Shareholders should have suffered more pain. Taxpayers should have received substantial compensation for the risk they took.

All that did come to pass in one case: the bailout of the American International Group, the large insurer and symbol of the crisis. Yet on Monday, a judge in Washington decided that the government’s actions were too severe, and the rescue was illegal.

Hank Greenberg Sued The Government For Bailing Out AIG, And He Actually Might Win

Of all the crazy things people have said about former AIG chief Maurice "Hank" Greenberg's lawsuit against the government, the craziest was that he just might win.

It's sounding less crazy all the time.

The possibility of a Greenberg victory at trial, which began six weeks ago is no longer unthinkable. According to a Bloomberg report, Greenberg has a real shot of winning his argument that the U.S. government bailed out the insurance firm he founded on "unfair" terms. Greenberg and his star lawyer, David Boies, may walk away with a $25 billion judgment in the case.

The A.I.G. Trial Is A Comedy

Say what you like about Maurice (Hank) Greenberg, the financier is a dogged old coot. For almost ten years now, since an accounting scandal forced him to resign from American International Group, the big insurance company he ran for decades, Greenberg, who is eighty-nine, has been trying to redeem his reputation and exact revenge on those he deems responsible for his downfall.

Greenberg’s initial target was Eliot Spitzer, who, when he was the Attorney General of New York, launched an investigation into A.I.G.’s accounting practices—an investigation that, in 2005, prompted Greenberg to resign with his reputation in tatters. Greenberg hasn’t forgiven Spitzer; just last year, he sued him for defamation. (The case is still pending, though part of it has been dismissed. Spitzer has denied wrongdoing.) But, since 2008, Greenberg’s primary target has been the regulators and Federal Reserve officials who orchestrated a government bailout of A.I.G. that prevented the firm from collapsing, though at a substantial cost to its stockholders, including Greenberg. (After he left A.I.G.’s board, he remained one of the firm’s largest shareholders.)

Bizarre Trial Accuses Government Of Illegally Bailing Out AIG

A bizarre reminder of some of the most terrifying moments in U.S. financial history just kicked off in Washington: Former AIG CEO Hank Greenberg's hubris-filled case against the government went to trial on Monday. Greenberg claims that the 2008 bailout AIG received from the government was illegal, and he's demanding $25 billion in damages.

AIG CEO: Bonus Uproar 'Just As Bad' As Racist Lynch Mob

Maybe you got angry about AIG paying huge bonuses just months after it nearly brought down the financial system and took a $182 billion bailout.

Well, then, you are exactly the same as a racist lynch mob in the Deep South in the Civil Rights era, according to AIG CEO Robert Benmosche.

He told The Wall Street Journal that the outcry over AIG's bonuses “was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that -- sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong."

"It is a shame we put them through that,” he added, referring to those poor employees who got huge bonuses.

AIG CEO Robert Benmosche: 'Too Big To Fail Has Been Solved'

Americans shouldn’t be worried about the nation’s biggest financial institutions sinking the economy any more, according to Robert Benmosche, the CEO of bailed-out insurance giant AIG.

“I believe 'too big to fail' has been solved,” Benmosche told the Wall Street Journal in a wide-ranging interview published Friday. He said that's because regulators and the financial firms themselves have put controls in place to prevent bankers and traders from taking the same types of risks they took in the lead-up to the financial crisis.

'Systemically Important Financial Institutions' Named By U.S. Regulator In Crackdown

WASHINGTON -- The U.S. government on Monday preliminarily designated at least three financial companies as having the potential to pose a grave threat to the financial system, the first time regulators have used post-financial crisis authority to crack down on companies that have previously escaped federal attention.

Washington's jaw drops at possibility of AIG lawsuit

Remember when AIG took a $182 billion bailout only to turn around and hand out seven-figure bonuses to the same guys who tanked their company?

Grab the pitchforks — it gets better.

Now the insurance organization might join a lawsuit against the U.S. government over the terms of the bailout — saying the deal that saved the company cheated shareholders.

AIG To Decide Whether To Join Insane Lawsuit: Seven And A Half Things To Know

Science has determined that people need to know 7.5 things per day, on average, about the world of business. You can't argue with science. Lucky for you, the Huffington Post has an email newsletter, delivered first thing every weekday morning, boiling down the day's biggest business news into the 7.5 things you absolutely need to know. And we're giving it away free, because we love you, and also science. Here you go:

Thing One: Whole World Angry At AIG, Again: If AIG were a C-list celebrity instead of a company, it would be Donald Trump. It just has a special gift for pissing people off.

Rescued by a Bailout, A.I.G. May Sue Its Savior

Fresh from paying back a $182 billion bailout, the American International Group has been running a nationwide advertising campaign with the tagline “Thank you America.”

Behind the scenes, the restored insurance company is weighing whether to tell the government agencies that rescued it during the financial crisis: thanks, but you cheated our shareholders.

The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal’s high interest rates and the funneling of billions to the insurer’s Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for “public use, without just compensation.”

The Randian and the Bailout

There's nothing subtle about Bob Benmosche. “I’m an in-your-face CEO,” he told me one day, looking down from his vantage point six feet and four inches above the ground. He is a big guy. Big block-shaped head. Big ham-size arms. Infamously big mouth. “People say I use colorful language,” he told a room of people once. “Well, that’s a bunch of bullshit!”

Occasionally Benmosche will lapse into the kind of lingo you expect to hear from someone who has spent 40 years on Wall Street, like when he talks about “cost structure” and “maximizing value,” but those are just the lemons in an otherwise rich and varied cornucopia of anecdotes, parables, fragments of talking points, historical data, conspiracy theories, and opinions that tumble forth whenever you ask him a question.

AIG CEO Robert Benmosche: 80-Year-Old Europeans Need To Be Working

This isn't your grandpa's economy. But it could still be yours once you're his age.

Robert Benmosche, chief executive of the recently bailed-out and largely government-owned American International Group, told Bloomberg from his seaside villa that he thinks the eurozone debt crisis will push the retirement age in the region way up.

"Retirement ages will have to move to 70, 80 years old," he said. “That would make pensions, medical services more affordable. They will keep people working longer and will take that burden off of the youth.”

Elizabeth Warren On AIG Tax Break: It's An Extra Bailout Worth Billions

WASHINGTON -- Former members of a congressional panel that oversaw bailouts during the financial crisis blasted the Treasury Department on Monday for quietly granting a tax break worth billions to insurance giant American International Group.

The tax break amounts to a "stealth bailout" on top of the $182 billion that AIG received from the government, and it unfairly helps AIG, its shareholders and executives, former oversight panel chair Elizabeth Warren and others said.

Warren, who also is a consumer advocate and Democratic candidate for U.S. Senate from Massachusetts, told reporters that tax breaks accounted for 90 percent of AIG profits last quarter.

"We think it's time for Congress to end the special tax break," she said.

Bending the Tax Code, and Lifting A.I.G.’s Profit

Last week, the American International Group reported a whopping $19.8 billion profit for its fourth quarter. It was a quite a feat for a company that was on its death bed just a little over three years ago, so sick that it needed a huge taxpayer bailout.

But if you dug into the numbers, it quickly became clear that $17.7 billion of that profit was pure fantasy — a tax benefit, er, gift, from the United States government. The company made only $1.6 billion during the quarter from actual operations. Yet A.I.G. not only received a tax benefit, it is unlikely to pay a cent of taxes this year, nor by some estimates, for at least a decade.

The tax benefit is notable for more than simply its size. It is the result of a rule that the Treasury unilaterally bent for A.I.G. and several other hobbled companies in 2008 that has largely been overlooked.

This rule-twisting could deprive the government of tens of billions of dollars, assuming the firm remains profitable. The tax dodge — and let’s be honest, that’s what it is — also will most likely help goose the bonuses of A.I.G.’s employees, some of whom helped create many of the problems that led to its role in the financial crisis.

Scott Walker Banks on AIG Mogul to Fight Recall

On Tuesday afternoon, Grassroots groups and the Democratic Party of Wisconsin will unveil their signature haul in the effort to recall Gov. Scott Walker and Lt. Gov. Rebecca Kleefisch. They need at least 540,208 signatures to trigger recall elections for Walker and Kleefsich, but it's clear they've easily surpassed that mark.

So where will Walker be when the final signature tally is announced? In the state capital or the governor's mansion, standing his ground and defending his record? Nope. He'll be in New York City at the world headquarters of the megabank Citigroup raising money for his recall defense effort.

Tuesday's Walker fundraiser, first reported by the New York Daily News, is hosted by no less than Hank Greenberg, the former CEO of American International Group, the global insurance corporation that needed $150 billion in bailout funds in 2008 and 2009 from the Treasury Department and Federal Reserve. The cost of attending is $2,500 per person or $5,000 per couple.