AIG Sinks on Mortgage-Related Losses

Updated from Feb. 28

American International Group (AIG Quote) promised Friday to make the "necessary investments" to correct internal control issues uncovered by its auditors after reporting the worst quarterly results in its history.

The world's largest insurance conglomerate said it swung to a fourth-quarter loss of $5.3 billion, due largely to a raft of writedowns on mortgage-related investments from throughout its various businesses. Most noteworthy, the company's financial products business took a pretax charge of $11.12 billion on its super senior secured credit default swap portfolio.

AIG said Joe Cassano, the head of AIG Financial Products, will retire at the end of March and serve as a consultant for the rest of 2008. ...