Calling AIG?

Internal Docs Reveal Company Silent About Dozens Of Collateral Calls

(CBS)  This story was written by CBS News Chief Investigative Correspondent Armen Keteyian for cbsnews.com.

CBS News has obtained internal documents that detail AIG’s potential exposure of $67 billion in credit default swaps tied to sub-prime mortgages.

According to one internal memo by late November 2007, the insurance giant had received at least 84 collateral calls totaling more than $4 billion, including 38 calls alone from investment giant Goldman Sachs worth $3 billion.

According to an email obtained exclusively by CBS News , on November 27, 2007, the former head of AIG’s Financial Products (AIGFP) unit, Joseph Cassano, forwarded to his boss a note written by then-AIGFP Executive Vice President Andrew Forster “laying out all the collateral call information to date.”

In the note Forster details what he terms “friendly discussions rather than disputed calls” with six major investment firms and banks.

In addition to Goldman’s $3 billion call Forster reports Merrill Lynch had made 18 margin calls for a total of $610 million; securities firm Calyon wanted $343 million; UBS had three calls for $40 million; while the French bank Societe General SA (25 calls), and the Bank of Montreal ($41 million) were also making substantial financial claims.

According to Forster’s memo, Goldman’s 38 positions at the time involved 23 different transactions under names like “Dunhill,” “Ischus II,” “Orchid II,” and “Triaxx Prime 2006-2.”

Yet despite all these requests, during a crucial December 5th conference call with investors AIG executives were silent about the specific number of collateral calls, only acknowledging "...and we have from time to time gotten collateral calls from people..." appearing to gloss over any potential problems with its CDS portfolio.

“The probability that it will sustain an economic loss is close to zero,” said former CEO Martin Sullivan during the call.

Investigators at the Justice Department and Securities and Exchange Commission are known to be honing on this time period to determine whether AIG executives misled investors and auditors about the contracts.

Regulatory filings reveal Goldman ($8.4 billion) and Societe General ($9.5 billion) were eventually paid nearly $18 billion in the 15 months prior to last September’s government bailout of AIG. Overall, 16 U.S. and foreign firms eventually received $85 billion in taxpayer funds as a bailout against the bad debt.

[highlander60]

We're are made to be held accountable every step of the way, why in the world are these people and other crooks like them "Not Held Accountable?" Enough is enough

[highlander60]

How long do you think this has been going??? We've been getting "RIPPED OFF" forever!!!

[45ford]

i've lost complete faith and confidence in the U.S. banking system. i moved all my banking overseas.

[vuenbelvue]

People need to be arrested and prosecuted and assets forfeited if found guilty. This is the upper eschelon making multiple millions a year in salaries, bunuses and perks. Much like the Health care CEO's paying themselves $80-$100 million a year manipulating insurance payments and patient co-pays. The foxes watching the hen houses and paying for bodyguards (lobbiest's) to get the Congress to protect them.

[despido]

Well, now we know what they did to earn those infamous bonuses. By the way, I thought Obama was going to retrieve those. Or the IRS was going to tax them into oblivion. Oh well, just more political blustering ahead of paying off your friends (contributors).... with our money.

Can't wait to see the bonuses for Goldman's exec's that talked the treasury into accepting 25 cents on the dollar as repayment of the TARP funds. $250+ Billion out..... $68 Billion back. You gotta admit, Wall Street has better negotiators than we do.

[Oregon_State_OSU]

AIG need to be broken up.

[doa578]

paragraph 3 of this story about AIG---November 27,2009? We haven't gotten there yet....it's only June

According to an email obtained exclusively by CBS News , on November 27, 2009,