AIG Credit Swapper Under Investigation

CBS Evening News: Executive Responsible For Selling Credit Default Swaps Under Scrutiny From U.S., British Regulators

(CBS)  As recently as 2007, a discreet office in the heart of London made a vast fortune for insurance giant AIG.

The man who ran it, 54-year-old American Joseph Cassano, and his team at AIG Financial Products were selling a financial instrument called credit default swaps.

In simplest terms, reports CBS News correspondent Elizabeth Palmer, Cassano and AIG Financial Services sold big banks and brokerage firms insurance against their investments dropping in value.

Now he -- and those deals -- are being blamed for AIG's collapse.

"It's the credit default swap people that really, and that was a very small number of folks, very small number of trades, they're the ones that brought our company to our knees," said AIG CEO Edward Liddy in testimony to the House Financial Service Committee on Wednesday.

It was a goldmine when times were good, and it just seemed to get better. In 1999, revenues were $737 million. By 2005 they were up to $3 billion.

The average pay in the unit was more than $1 million a year per employee, and Cassano earned more than $280 million in 7 years. Even when the markets began to weaken, Palmer reports, Cassano's confidence didn't.

"It's hard for us, and, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing $1 in any of those transactions," Cassano told an analyst.

But only two months later, with the real estate market weakening, AIG announced a $352 million loss on the credit swaps, and that was only the beginning.

Suddenly the company was on the hook to pay out billions it didn't have.

Although he was forced to retire a year ago, AIG allowed Joseph Cassano to keep living in the company's luxurious London house, and apart from a multi-million dollar severance agreement, gave him a nine-month consulting contract for $1 million a month.

As rage builds over AIG's compensation packages, it's no surprise Cassano is keeping a very low profile.

Palmer recently went to the AIG mansion where Cassano stays, but he refused to be interviewed.

"I don't want to talk to anyone right now," he said.

U.S. regulators and the British Serious Fraud office are now investigating Cassano's dealings to determine whether they were just excessive and risky, or criminal.

[Weliqwk]

Is it true that this guy contributed to Obama! If that is the case, who the heck in government can we trust? Paulson is in Wall Streets pocket ($700B worth). Isn't Geithner? Not to mention Senators who received millions, such as Dodd and Gramm to ensure this whole scam and AIG setup would work. Is this why the taxpayer is now going to buy up the toxic assets with private investors so that Wall street can make even more money out of this, and even more big payouts for these finanacial wizards? All at the taxpayer and main street expense.

[starleo146]

Posted by maddog0802 at 7:50 AM : Mar 20, 2009

I think you are so right. I heard about this guy before and wonder what is taking them so long to indict him and the payoff he got to go away and not work there any more can you believe how they handled this guy?

[gordon_geeko]

People who make a lot of money have a lot of power. These bank execs have been in bed with the government for decades, which is why none of them were caught before the crisis began and why very, very few are even under indictment right now. They still have lots of money to throw around, so the government is mostly huffing and puffing for the media while doing relatively little to hold them accountable. Notice how they're still getting public tax dollars to bail out their ponzi schemes?

[fundu2009]

they found a goat

[roach9703]

CDO is just another sucker product that duped millions. The down fall of the accounting profession has accelerated the proliferation of fraud to the point that even store clerks churn inventory price files on their cash registers, churn credit slips, and cash refunds with the help of their supervisors.
FRAUDLAND UBER ALLES!

[sonofsatan]

Hanging is too good for Madoff and his accomplice Joseph Cassano. How many American people are now ruined financially because of these two hoodlums? Is Sing Sing Prison still in operation?

[maddog0802]

Cassano is the ringleader of the entire global financial collapse. It will now finally all come out, wait and see. It was him, and the 'financial products' division of AIG that he headed up since the 80's or 90's? that conceived these 'credit default swaps'. It all amounted to issuing insurance to banks and mortgage companies to cover their losses in the event their loans went bad (which of course they did). The main problem? NO RESERVES!! Cassano and his crew figured out that the government didn't know this was really insurance, so they weren't required to have ANY RESERVES to back up the 'insurance' they were in effect writing. Cassano made over $278 MILLION dollars in 7 years, and then as this story says, he got $1 MILLION a MONTH (after he was forced to retire because the company started hemorroghing losses) pay as a 'consultant'. 'Consultant' for what?!?!? How to destroy the company and the world economy, while pocketing $1 million a month? If you think Congress and the American public are pissed now, just WAIT until the truth about this monster comes out!!! You aint seen nothing yet, folks!!!!

[I_am_me1953]

AIG Credit Swapper Under Investigation
_________________

Quit investigating him, he needs a "retention payment" afterall he is only making $1M a month right now and has to live in the company mansion. His cash flow is severly restricted at the present monment. Pleaswe hurry with his "retention payment".

[oftencensord]

I'm glad to see CBS is finally getting to the credit default swaps, what's taken so long? AIG sold them, all the big banks sold them, investment firms sold them, they all sold them to each other to offset the CDS's they sold...its a vicious insurance circle of counter leveraging... it is no wonder they don't know how much debt they have.

The people selling them are just insurance salesman, they did nothing wrong. Like any insurance, the payouts were supposed to be minimal, a small percentage of the premium collected... just like life insurance or car insurance.

But in the end, it appears the US Government gets what it deserves. Issuing Government backed securities on subprime home loans to investors, the investors protected their investments with the CDS, Fannie & Freddie collapses from home loan defaults, banks are on the hook to pay CDS claims to investors, investment banks collapse causing more CDS claims,... AIG is on the hook to pay CDS claims to banks, the US Government picks up the tab for the CDS payouts ( which is far more money than the original home loan defaults ) !

Thank you Obama for presenting a snow job summary of the situation on the Tonight Show. Jay Leno read his lines..... do you think it is appropriate for the US Government to intimidate political and social satirists "in your face" like that?

[rdaleabshire]

What about Dennis Nally at PricewaterhouseCoopers.... http://pwcsucks.com/_wsn/page3.html

or Christopher Condron at AXA http://www.PWCSUCKS.com/ once a crook always a crook! They make Madoff look like a Saint!

Subject: AXA / MONY
Date: 6/13/2008 3:06:26 P.M. Central Daylight Time
To: [e-mail]
CC: foia/[e-mail], [e-mail], [e-mail], [e-mail]

Mr. Christopher Cox
Chairman
Securities & Exchange Commission

June 13, 2008

Dear Mr. Cox:

This afternoon I once again noted the SEC reviewing the contents on my web sites that contain information about criminal conduct by various elected officials and members of the SEC with regard to AXA and MONY. It reminded me that Linda Chatman Thomsen had not bothered to respond to my October 31, 2005 FOI request (copy attached). I recently testified in a Texas court that my sites had been reviewed without objection by the Texas Department of Insurance, the USDOJ and the Securities & Exchange Commission. I ask again that the SEC comply with the FOI request and state any objections to the information contained on those sites.
My web sites are:
http://www.PWCSUCKS.com/
http://www.MONYBUSH.com/
http://www.MONYINTERNATIONAL.com/
http://www.GonzalesAG.com/
http://www.SpitzerAG.com/
http://www.TAMUEX.com/
http://www.MONYSUCKS.com/
http://www.TEXASTHUGS.com/

If upon review the SEC determines that any of the content of the sites is incorrect I ask that you please let me know ASAP so that I can make the proper corrections. If I do not hear from you I will assume that you are in full agreement with the content. Your help with the FOI will be greatly appreciated.

Respectfully,

R. Dale Abshire
2606 TWelve Oaks Lane
Colleyville, TX 76034

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
br />
Subj: Attention Linda Thomsen ..... Fraud Report / FOI
Date: 10/31/2005

Linda Chatman Thomsen
Director, Division of Enforcement
US Securities and Exchange Commission


Dear Ms. Thomsen:

I have noted your promotion of Walter Ricciardi as "Deputy Director of the Division of Enforcement" for the SEC and wanted to verify with you that he in fact is the same Walter Ricciardi that I have featured on the http://www.PWCSUCKS.com/ web site. Mr. Ricciardi is directly responsible for your inability to produce or cause to be produced an accurate, concise and properly opined financial statement for The Mutual Life Insurance Company of New York and its successors for over 20 years. Mr. Ricciardi belongs in jail for his part in this ongoing cabal.

Under Freedom of Information I request that you provide me with an accurate, concise and properly opined financial statement for the above referenced company, commonly referred to as MONY, for anytime in the last 10 years that the SEC will stand by. I also request that you provide me with any and all communications between the Securities and Exchange Commission and PricewaterhouseCoopers L.L.P. that relate to the lack of independence by PWC with regard to MONY's financial statements along with communications to and from MONY and AXA.

I also request the information previously requested in the letter enclosed, (Under Freedom of Information I request the names of the 14 companies that were not named in the PWC action by the SEC listed below. ("In the Matter of PricewaterhouseCoopers LLP, and PricewaterhouseCoopers Securities LLC, Exchange Act Release No. 46216 (July 17, 2002) http://www.sec.gov/news/press/2002-105.htm").

I am also attaching a copy of a recent letter to Senator Bill Nelson relating to his part in the perpetrating of this fraud on the public. This is a fraud that was condoned and aided by the Securities and Exchange Commission.

Please do not hesitate to contact me with any questions or clarifications of the requested information. You may also find it easier to simply tell the truth about this matter that has gone on far too long.

Respectfully,

R. Dale Abshire
3308 Pin Oak Lane
Bedford, TX 76021

[quapawsix]

Brought back to the states to face charges?, Possible master mind ?, Will this never end?
Stay tuned to the same Bat Time and the same Bat channel for further episodes of Economy in
the Toilet. Bye Bye Money.

[lamdepressed]

One of the biggest culprits responsible for this economic mess is the ?Federal Reserve? which was created in 1913 by subverting the Constitution. Under the disguise of the word ?Federal?, several investment banks including the banks which are owned by a dozen European banking organizations, mostly British, and most notably the Roschild banking dynasty, were empowered to establish a private banking cartel that has been controlling our economy to the detriment of the American People. No doubt ?Federal Express? would have done a better job.

[smallbuthere]

More people need to read this a get word to congress to PASS THE HPBA ACT. This piece of legislation makes more sense than any of the great Stimulus Package.

[tincup356]

When will this man be extradited to the United States to face charges?

[whitemale08]

I TOLD YOU!!!!!

LYNDON LAROUCHE!!!!!

WE TOLD YOU!!!!!!

ALL CRITICS OF LYNDON LAROUCHE SHOULD SILENCED!!!!!

PASS HIS HPBA (Home Owners Bank Protection Act) NOW!!!!!!