Walter Mencken 2:37 p.m., March 1
AIG Policyholders at Risk, Say NY Times, Local Suit
The New York Times today (July 31) finally stated what intelligent observers already know: policyholders in the multifarious subsidiaries of American International Group (AIG) are at risk because of the long-running incestuousness. The company is artificially supported by subsidiaries owning stock in each other and reinsuring each other. The story by Mary Williams Walsh was taken in part from an amended complaint filed today in Los Angeles Superior Court by the San Diego law firm of Aguirre, Morris & Severson. The basic suit charges that AIG funneled money from insurance operations to gamble in derivatives. It seeks to protect California policyholders. Maria Severson of the firm was quoted in the Times saying that the suit seeks to bar AIG from soliciting new business without revealing its financial status.
Another quoted in the story is Mississippi insurance expert and forensic account Thomas Gober, who is assisting the San Diego firm in the suit. "The financial [statements] I have reviewed lead me to believe that AIG's equity is enormously negative," Gober says. "But for funding from the government, AIG is insolvent." Mike Aguirre of the firm points out that the federal government's feeding of money to AIG is essentially "subsidizing wrongdoing." The company took more than $180 billion from the government and continues unlawful activities, "manipulating liabilities and assets in violation of insurance regulations." Also, state regulators, who are supposed to monitor insurance companies, have been neutralized, he says.
More like this:
- San Diegans Leading Push for AIG Full Disclosure — Jan. 9, 2010
- AIG (That's Us) to Pay Its Ex-CEO's Legal Fees — Nov. 25, 2009
- Judge Rules Fraud Case against AIG Can Proceed — Oct. 8, 2009
- Why Haven't State Regulators Gone After AIG? — June 13, 2009
- Local Law Firm Sues AIG for Fraud in Los Angeles Court — May 21, 2009