This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

AIG Bonuses Draw Obama's Ire

Updated from Monday, March 16

President Barack Obama on Monday lent the most authoritative voice yet to the growing chorus of government officials critical of American International Group's (AIG - Get Report) award of about $165 million in federal bailout funds as bonuses to executives.

Obama, speaking at a White House gathering of small business owners, said he directed Treasury Secretary Timothy Geithner to pursue "every single legal avenue" to block AIG from awarding the bonuses. The federal government controls some 80% of the giant insurer after pouring in more than $170 billion in bailout funds to stave off its collapse since September.

"This is a financial company that finds itself in distress due to recklessness and greed," Obama said. "It's hard to understand how derivative traders warranted any bonus -- how do they justify this?"

AIG reported this month that it lost $61.7 billion in the fourth quarter of last year, the largest corporate loss in history. AIG has argued that it contractually obligated to pay the bonuses.

"This isn't about dollars and cents, it's about our fundamental value," Obama said.

Should AIG be allowed to pay its planned bonuses?


Meanwhile, New York Attorney General Andrew Cuomo told AIG he wanted a list on his desk by the end of the day of employees set to receive the bonuses. He said his office will investigate whether the employees were involved in the insurance giant's near-collapse and whether the bonus payments are fraudulent under state law.

Cuomo made good on a threat he made Monday in a letter to AIG's government-appointed chief executive, Edward Liddy, in which he said he would issue administrative subpoenas after 4 p.m. if he didn't get the employees' names, information about their work at AIG's financial products subsidiary and the contracts the company said required paying the bonuses, the Associated Press reports. The financial products unit sold credit default swaps, the risky contracts that caused massive losses for the insurer.

"Four o'clock has come and gone. We haven't got the information. We'll be issuing subpoenas immediately," Cuomo told reporters in a conference call after the deadline.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AIG $52.30 -2.00%
AAPL $95.01 1.05%
FB $99.75 -4.15%
GOOG $682.74 -0.12%
TSLA $147.99 -8.99%


Chart of I:DJI
DOW 16,027.05 -177.92 -1.10%
S&P 500 1,853.44 -26.61 -1.42%
NASDAQ 4,283.7530 -79.3910 -1.82%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs