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Source: Cassano In Congressional Investigators' Sights
Another set of investigators is hot on the trail of Joseph Cassano, the man who walked away with a multi-million dollar golden parachute after spearheading the credit default swaps that brought down AIG.
Investigators for the House Oversight committee intend to interview Cassano about his role in the firm's collapse, and have already contacted his lawyer, a committee staffer told TPMmuckraker.
As CEO of AIG Financial Products, Cassano, based in the unit's London office, was the prime mover behind the credit default swaps, whose implosion brought the firm to its knees. He stepped down in March 2008, signing a $1 million-a-month "consulting" contract with the firm. (The contract was canceled last September.)
Federal investigators, as well as Britain's Serious Fraud Office, are also probing AIGFP. The Feds are reportedly focused in particular on whether Cassano and then-AIG CEO Martin Sullivan made false or misleading pubic statements about the company's potential exposure to losses on its credit default swaps. A December 2007 shareholder presentation the two men made is said to be of special interest.
Cassano's lawyer, Joseph Warin of Gibson, Dunn, and Crutcher -- whose record as a white-collar crime specialist we told you about here and here -- did not immediately respond to a call from TPMmuckraker.
The House Oversight committee has been probing AIG's role in the collapse since last fall. Earlier today, we reported that former AIG CEO Hank Greenberg will testify before the committee April 2nd.
Josh
Zachary
AIG stopped writing CDS in 2005, according to various reports.
When they stopped writing them, did they start hedging them and if so how?
Does this indicate that AIG (AIGFP in particular) knew of their precarious position in 2005 or very soon thereafter? If not immediately, when?
The market would know, if AIG started hedging and word leaked out.
2005 was the top of most of the housing bubble, with actual reported soft price peaks from about Jan-Dec of 2006.
March 24, 2009 6:01 PM | Reply | Permalink
Some of these people need to go to jail. There's no way they destroyed their companies and our economy and didn't break any laws or defraud.
March 24, 2009 6:02 PM | Reply | Permalink
how about treason? what i wouldn't give to see these sobs treated and charged like terrorist suspects -- the damage they've inflicted thru their staggering, unfathomable greed has to exceed that done on 9/11. and their actions were just as deliberate as osama's.
March 24, 2009 6:51 PM | Reply | Permalink
i've been wondering why in the hell that guy has so successfully avoided attention. read matt taibbi's piece in rolling stone -- he and phil gramm should be stripped of every asset they and their families own and thrown out into the streets.
http://www.rollingstone.com/politics/story/26793903/the_big_takeover
March 24, 2009 6:10 PM | Reply | Permalink
That Taibbi piece is the best knucklehead-friendly piece I've seen on this whole debacle to date.
And it occurred to me while reading it that, aside from taking the money and running, half the bonus monies could be characterized as hush money - to keep the mouths of the AIGFB guys, especially Cassano, shut.
Speaking of Cassano, I don't expect to see him return to the states for a long, long time, if ever. Good thing the Brits are investigating him too. Still, wouldn't be surprised to hear that he's mysteriously disappeared, or even pulls a Ken Lay.
March 24, 2009 6:31 PM | Reply | Permalink
The Rolling Stone piece was particularly insightful in pointing out the absurdity of the government TSA 'security program' checks of juice/shoes/crotches/Grannies at airports while the Feds let the boys holding the cash boxes run the country into near financial collapse.
March 25, 2009 12:15 AM | Reply | Permalink
'bout time!
March 24, 2009 6:11 PM | Reply | Permalink
My own take on the retention contracts is that they were legalized extortion. Those receiving the bonuses collectively threatened to leave AIG, and possibly work for competitors to increase AIG's exposure. These people were the exact opposite of the brave people who volunteered after December 7,1941, or the people who went back into the WTC on September 11, 2001. When the USA was in financial peril in 2008 caused largely by AIG, some people in AIG went looking for bonus money for themselves.
March 24, 2009 6:19 PM | Reply | Permalink
My own take on the retention contracts is that they were legalized extortion. Those receiving the bonuses collectively threatened to leave AIG, and possibly work for competitors to increase AIG's exposure.
___________________________
Do you have any links to this claim?
That would be great to know!
March 25, 2009 12:16 PM | Reply | Permalink
TPM needs to get a new picture of cassano. Don't get me wrong, the one you have is great, makes him look like a sneaky tool. It's just that variety is the spice of life.
March 24, 2009 7:46 PM | Reply | Permalink
Cassano is not posing for new pictures, one million a month can buy a lot of privacy.
March 25, 2009 12:17 AM | Reply | Permalink
Obama needs go the G20 financial meeting and pull Gordon Brown aside to tell him that the "special relationship" isn't looking so special these days. The problem may be a bit arcane, but it has allowed some people, operating under the protection of Britsh law, ample opportunity to wreck the US financial system. First is the fact that derivatives trading is still handled at the brokerage level, rather than the account level (a newer approach launched in Scandinavian derivatives markets in the 1980s and now quite common). What this means is that the normal daily clearing of positions of each account can be avoided. It is no coincidence AIGFP operated out of London, and no surprise that London is reluctant to ask questions as world finance feeds the city's economy and provides a home for the UK's FSA, once billed as the world's first "super" financial supervision authority.
Second, the big houses such as Goldman Sachs operate on both sides of the pond, but London is used as neutral ground in arranging M&A activity that may arouse regulators or local politicians in home countries. For example, the Chrysler-Daimler-Benz merger, hardly a peanut, was arranged in London back in 1997. At the time, business writers couldn't control their compulsion to use the word "synergy" (which never existed), and Chrysler's management was unflagging in feeding its "merger of equals" crap to the press as the share price spiked. Of course, GS and Chrysler's feckless CEO Bob Eaton had taken the money and run within a year. Today Chrysler is divorced, pimped out to a private investor group and a ward of the state. In other words, brokerages, working with corporate officers, have power to seriously damage the real economy in the US from their London offices.
March 25, 2009 3:50 AM | Reply | Permalink
I'm not so sure that Obama needs to chastize Gordon Brown as apologize (in behalf of our screwed-up, deregulated, nobody's-minding-the-store system) assuming that the information in Matt Taibbi's Rolling Stone piece is correct:
It more appears that our regulators in concert with our regulated firms pulled the wool over the Brits eyes.
March 25, 2009 9:52 AM | Reply | Permalink
First, I loved Taibbi's piece. My point is that London has offered a haven from scrutiny for misbehaving agencies. Moreover, the tiny OTS, created under Bush Sr. (remember Neil Bush and Silverado were still fresh), is fairly toothless as it is paid by those it supervises, including AIG, rather than out of taxpayer funds. Perhaps it can be called a regulator in the sense that the SEC is Colonel Klink and OTS is Sargeant "I know nothing" Schultz. I'm not saying the Brits are the bad guys. Far from it, they are also largely victims. But even today brokerage houses are still treated under gentleman's rules. Failure to regulate at the account level was what wiped out the entire Barclays Bank in 1997. More recently, Northern Rock, a former British building society, got involved with a sub-prime "candyman" named Lehman Brothers in 2006. Yet it took the bank regulators more than a year to recognize the problem, and in the end Northern Rock had to be nationalized.
March 25, 2009 11:04 AM | Reply | Permalink