Former American International Group chief files suit against government

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Tags: hank greenberg, aig, aig ceo sues fed, starr international company, federal reserve bank of new york, new york fed, government takeover

Former American International Group chief files suit against government

The Wall Street Journal says that a previous Wall Street CEO is suing the government. As reported by Greenberg’s $25 billion discrimination law-suit, the federal government should not have been permitted to take over AIG. Rather, it should have of-fered a bailout as it did to other Wall Street corporations. Read more here: https://personalmoneynetwork.com/moneyblog/2011/11/22/aig-ceo-sues-government/

Too much from the government

When dealing with the AIG, the government overstepped its bounds, as reported by the United States Court of Federal Claims suit in Washington, D.C. Read more here: https://personalmoneynetwork.com/moneyblog/2010/02/03/aig-bonuses-2010-100-million/

“The government is not empowered to trample shareholder and property rights even in the midst of a financial emergency,” reads the suit.

CNN Money explains that Greenberg and Star filed another suit besides the suit against the federal government. This was filed against the Federal Reserve Bank of New York in Manhat-tan.

What it states in the lawsuit

During the Hank Greenberg/Starr lawsuit, U.S. Assistant Secretary for Financial Stability Tim Massad explained what the government did.

“It is important to remember that the government provided assistance to AIG — and stopped it from collapsing — in order to prevent a meltdown of the entire global financial system,” Massad said in a written statement.”

The New York Fed doesn’t like the suit either. It says there was no merit to levy it.

“AIG’s board of directors had an alternative choice to borrowing from the Federal Reserve and that choice was bankruptcy,” said the organization in a statement.

Largest AIG shareholder was Starr

When the United States government did the takeover in Sept 2008, Starr was AIG’s biggest shareholder. He states that the government used American Interna-tional Group to bail out many businesses after taking 80 percent of AIG’s common stock interest. American International Group was not given loans by the government. It denied aid to the business while lending other finance and insurance compa-nies that needed help.

“Rather than granting AIG the same access to liquidity assistance that it granted to numerous other institutions, including various foreign companies, the government instead chose to use the difficulties faced by AIG to implement a takeover of the company without just compensation,” reads the lawsuit.

Get a bit more

Sources

CNN Money: http://money.cnn.com/2011/11/21/news/companies/aig_greenberg_lawsuit/

Daily Caller: http://dailycaller.com/2011/11/22/greenberg-sues-feds-for-25-billion-for-taking-over-aig/

Wall Street Journal: http://online.wsj.com/article/SB10001424052970204443404577051983133404566.html

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