The Executive Who Brought Down AIG Joseph Cassano Made More Than $300 Million at the Insurance Firm

[kpete]

Source: ABC News

The Executive Who Brought Down AIG
Joseph Cassano Made More Than $300 Million at the Insurance Firm He Virtually Bankrupted
By ANNA SCHECTER, BRIAN ROSS, and JUSTIN ROOD
March 30, 2009


The FBI and federal prosecutors are reportedly closing in on the AIG executive whose suspect investments cost the insurance giant hundreds of billions of dollars. The government is investigating whether or not 54-year old Brooklyn-native Joseph Cassano committed criminal fraud in virtually bankrupting the company.

"He almost single-handedly is responsible for bringing AIG down and by reference the economy of this country," said Rep. Jackie Speier (D-Ca.)

Cassano, who lives in London, made more than $300 million running the infamous Financial Products Division of AIG where he, with about a dozen others, committed AIG to insure what turned out to be more than a trillion dollars worth of junk quality loans held by banks.

"He is the golden boy of the casino," said Rep. Speier. "They basically took peoples' hard earned money and threw it away, gambled it and lost everything. And he must be held accountable for the fraud, for the dereliction of his duty, and for the havoc that he's wrought on America."

Read more: http://abcnews.go.com/Blotter/story?id=7210007&page=1%3C/a%3EABC%20News%3C/em%3E,%20which%20tracked%20down%20the%20former%20AIG%20Financial%20Products%20czar%20wearing%20blue%20spandex%20and%20a%20sheepish%20expression%20outside%20his%20home%20in%20L

[bluestateguy]

1. This is the guy, not Liddy, who fucked everything up

Obama can make one phone call and have his ass sent to wherever we put the enemy combatants.

I'm not interested in "rights" for corporate supercriminals.

[hugo_from_TN]

4. I pointed this out last week when Congress was grilling Liddy and

everyone was up in arms about the bonuses. This is the guy that should be getting all the sh*t. Liddy came in at $1 salary to try to turn the company around, or at least cushion the fall. I'm sure he's no saint, but it pissed me off to see some house reps take out their faux anger on him.

[Brucie Kibbutz]

5. Liddy was oblivious to it all.

"AIG CEO Liddy Said He Didn't See Anything Illegal in Cassano's Actions

Earlier this month, AIG CEO Edward Liddy told Congress Cassano had done nothing wrong.

"I'm not a lawyer but there is no evidence of wrongdoing in any of this," said Liddy".

"WTF, man, I didn't know" :shrug:

[hugo_from_TN]

7. Stupidity, Carelessness, Greed - none are illegal.

Can you point to specific illegalities that Liddy was oblivious to?

[Brucie Kibbutz]

8. Can you point to my specific claims of illegalities on Liddy's part?

I was merely expressing my skepticism that he had no idea what had been going on. I made no mention of him being criminally responsible for anything.

[indimuse]

2. and..

they jail a person for smoking pot!... 300 mil...

[Arctic Dave]

3. Wasn't someone posting last week about how this guy was

being unfairly targeted? Does anyone know what I'm refering to?

[Igel]

9. You may be confusing deSantis and Cassano.

DeSantis, a player who wasn't involved with the soon-to-become toxic deals, claims to have made AIG lots of money, who got a large bonus per his contract and $1 in salary. If what he says is on the up-and-up, he did nothing obviously illegal--just unpopular.

Cassano, who was putatively responsible for the soon-to-become toxic deals, left when things got nasty, and got large salaries and bonuses. It's not clear he did anything illegal--the Constitution and those in government sworn to uphold it are generally in favor of due process and feel it's incumbent upon them to actually track down evidence of guilt, notwithstanding numerous Congress ... er ... notwithstanding numerous people involved with each other in congress.

[Arctic Dave]

11. Aha, thank you.

[burythehatchet]

6. Cassano and Marty Sullivanneed to be indicted. Sullivan allowed Cassano

to shoo away their internal auditor.

[BelgianMadCow]

10. and who allowed government oversight of AIG in the UK (where Cassano was) to be done by ONE guy?

of OTS - OTS is the Office of Thrift Supervision - the smallest and worst-equipped of the regulators. According to the Rolling Stone article last week, the OTS had ONE guy on AIG.

From the article:

In the biggest joke of all, Cassano's wheeling and dealing was regulated by the Office of Thrift Supervision, an agency that would prove to be defiantly uninterested in keeping watch over his operations. How a behemoth like AIG came to be regulated by the little-known and relatively small OTS is yet another triumph of the deregulatory instinct. Under another law passed in 1999, certain kinds of holding companies could choose the OTS as their regulator, provided they owned one or more thrifts (better known as savings-and-loans). Because the OTS was viewed as more compliant than the Fed or the Securities and Exchange Commission, companies rushed to reclassify themselves as thrifts. In 1999, AIG purchased a thrift in Delaware and managed to get approval for OTS regulation of its entire operation.

Making matters even more hilarious, AIGFP — a London-based subsidiary of an American insurance company — ought to have been regulated by one of Europe's more stringent regulators, like Britain's Financial Services Authority. But the OTS managed to convince the Europeans that it had the muscle to regulate these giant companies. By 2007, the EU had conferred legitimacy to OTS supervision of three mammoth firms — GE, AIG and Ameriprise.

That same year, as the subprime crisis was exploding, the Government Accountability Office criticized the OTS, noting a "disparity between the size of the agency and the diverse firms it oversees." Among other things, the GAO report noted that the entire OTS had only one insurance specialist on staff — and this despite the fact that it was the primary regulator for the world's largest insurer!

more at http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=5293954
The FP in AIG stands for financial products, and it was the division Cassano headed, about 400 persons strong. 400/1, now THAT is leverage.

[aquart]

13. No problem for me.

I can see them being indicted in several nations, in fact.

[Rage for Order]

12. I have a problem with this part of the story

"He almost single-handedly is responsible for bringing AIG down and by reference the economy of this country," said Rep. Jackie Speier (D-Ca.)

This guy may be responsible for the demise of AIG, but for Rep. Speier to try to lay the blame of the downfall of the entire economy at this guy's feet is absurd. Unless this guy did not report to anyone, he is not solely responsible for anything. Who was his boss, and his boss's boss? And what about the board of directors and the compensation committee?

Go after this guy, and if he broke the law then file charges against him. But this attempt to narrow it down to a few bad apples is bullshit. This economic crisis was caused by the cultivation of a culture of greed and arrogance that occurred over a period of decades.

[liam_laddie]

15. Not bullshit; he bears huge responsibility

This is the guy who wouldn't let AIG's internal auditor see the CDS records "because it would pollute the process."(Sept 2007)
See TPM link <http://tpmmuckraker.talkingpointsmemo.com/2009/03/did_cassano_and_aig_commit_fraud.php>
I do agree that the ethical/moral atmosphere encouraged such behavior, but this individual rolled very very large dice indeed, going back to 2004 at minimum. Though I think St. Ronnie's "behind the curtain" controllers started the deregulation ball rolling down the hill in 1981.

[FailureToCommunicate]

14. Go Brian Ross, and his team! Lots of important digging on stories like loose nukes.

www.abcnews.go.com/WNT/story?id=129441&page=1