AIG (American International Group, Inc.), one of the most-extensive insurance networks in the world, is exploring whether it has a basis for filing its own complaint against Goldman Sachs. AIG previously agreed to an $85 billion bailout, conceding an ownership stake of the insurance giant to the U.S. government. The government intervention was a result of concerns over financial mismanagement and the potential for AIG collapsing without federal assistance.
Mere days after the SEC (U.S. Securities and Exchange Commission) levied a fraud case against Goldman Sachs, AIG is claiming losses in the range of $2 billion from insuring mortgage-backed securities owned by Goldman Sachs. AIG is apparently investigating whether or not Goldman Sachs purposely did not divulge strategic information that would have altered their decision to insure the debt.
Late last week, the SEC alleged that Goldman Sachs intentionally deceived investors into purchasing mortgage-backed securities that were intended to fail. In addition to the investigation by AIG, other European institutions that may have sustained significant losses are also taking a keen interest in the SEC proceedings against Goldman Sachs. Among those institutions are the Bank of England, the German Finance Ministry and the U.K.’s Financial Services Authority, to name a few. Congressional leaders are also expected to incorporate their input into the proceedings, as well.
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