Key House lawmakers are calling for a probe of allegations that AIG (AIG) is striking a tougher stance in settling obligations with U.S. banks, while going easier on foreign ones.
Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee, on Wednesday wrote to Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke and asked that they look into the allegations brought by Rep. Spencer Bachus (R., Ala.), the committee's ranking Republican.
"I have been informed that, in contrast with its treatment of foreign banks, AIG is now attempting to force many of its creditors that are U.S. banks to accept severe reductions in the debt that is owed to them," Bachus writes in a letter to Frank.
About $100 billion in taxpayer money has flowed through AIG to its counterparties, and a majority of it went to foreign institutions, Bachus writes. AIG's largest payouts following its bailout went to Goldman Sachs (GS), Bank of America (BAC) via its purchase of Merrill Lynch, Deutsche Bank (DB) and Societe Generale (GLE).Smaller payments went to a host of other banks, including Morgan Stanley (MS) and Royal Bank of Scotland (RBS).
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV