Too Big to Fail - Andrew Ross Sorkin [312]
Jeffrey, Evan Greenberg: Albert B. Crenshaw, “Another Son of CEO Leaves AIG,” Washington Post, September 20, 2000; Christopher Oster, “Uneasy Sits the Greenbergs’ Insurance Crown,” Wall Street Journal, October 18, 2004; Diane Brady, “Insurance and the Greenbergs, like Father like Sons,” BusinessWeek, March 1, 1999.
AIG agreed to pay $10 million: According to an SEC press release: “AIG developed and marketed a so-called ‘non-traditional’ insurance product for the stated purpose of ‘income statement smoothing,’ i.e., enabling a public reporting company to spread the recognition of known and quantified one-time losses over several future reporting periods…. AIG issued the purported insurance policy to Brightpoint for the purpose of assisting Brightpoint to conceal $11.9 million in losses that Brightpoint sustained in 1998.” U.S. Securities and Exchange Commission, “AIG Agrees to Pay $10 Million Civil Penalty,” September 11, 2003. http://www.sec.gov/news/press/2003-111.htm.
AIG agreed to pay $126 million to settle: “In consenting to settle the Commission’s action and related, criminal charges, AIG has agreed to pay disgorgement, plus prejudgment interest, and penalties totaling $126,366,000.” Securities and Exchange Commission v. American International Group, Inc., Litigation Release No. 18985 / November 30, 2004. See http://www.sec.gov/litigation/litreleases/lr18985.htm.
“deferred-prosecution agreement”: Pamela H. Bucy, “Trends in Corporate Criminal Prosecutions Symposium: Corporate Criminality: Legal, Ethical, and Managerial Implications,” American Criminal Law Review, September 22, 2007.
“Dr. Strangelove of Derivatives”: Lynnley Browning, “AIG’s House of Cards,” Portfolio, September 28, 2008.
Warren Buffett called them weapons of mass destruction: In the past he had referred to them as “time bombs” and “financial weapons of mass destruction.” Clare Gascoigne, “A Two-Faced Form of Investment—the Culture of Derivatives,” Financial Times, May 3, 2003.
Sosin fleeing to A.I.G: Sosin signed a joint venture agreement with AIG on January 27, 1987, and shortly recruited the ten men who would join his team, which already included Drexel’s Randy Rackson and Barry Goldman as partners. See Robert O’Harrow Jr. and Brady Dennis, “The Beautiful Machine,” Washington Post, December 29, 2008.
traders got to keep some 38 percent of the profits: Ibid. AIGFP reportedly kept 38 percent of the profits, with AIG retaining 62 percent. The Washington Post noted that Greenberg later said his figure was 65 percent.
“You guys up at FP ever do anything to my Triple-A rating”: Ibid.
Greenberg’s “shadow group”: Ibid. Randall Smith, Amir Efrati, and Liam Pleven, “AIG Group Tied to Swaps Draws Focus Of Probes,” Wall Street Journal, June 13, 2008.
BISTRO and J.P. Morgan: Gillian Tett, “The Dream Machine,” Financial Times, March 24, 2006; Jesse Eisinger, “The $58 Trillion Elephant in the Room,” Portfolio, November 2008.
“How could we possibly be doing so many deals?”: Brady Dennis and Robert O’Harrow Jr., “Downgrades and Downfall,” Washington Post, December 31, 2008.
“It is hard for us, without being flippant.”: Ibid.
“does not rely on asset-backed commercial paper”: “American International Group Investor Meeting—Final,” Fair Disclosure, December 5, 2007.
In 2007 one of its biggest clients, Goldman Sachs, demanded: Serena Ng, “Goldman Confirms $6 Billion AIG Bets,” Wall Street Journal, March 21, 2009.
“It means the market’s a little screwed up”: AIG investor meeting, Fair Disclosure Wire, December 5, 2007.
“We have, from time to time, gotten collateral calls from people”: Ibid.
Greenberg’s forced resignation, Spitzer’s criminal threat: According to the Wall Street Journal, Spitzer threatened AIG’s board with criminal charges unless it dismissed Greenberg. He was forced out as chairman and CEO on March 14, 2005. Spitzer filed a civil fraud suit against the firm in May, accusing