NEW YORK (

TheStreet

) --

AIG

(AIG) - Get American International Group, Inc. Report

shares fell in early trading Wednesday after the U.S. Treasury Department and the insurer sold 300 million shares Tuesday at $29.

Shares of AIG were down 3.5% to $28.43 about an hour into trading. The Treasury's sale of AIG shares raised $5.8 billion, bringing the government's stake in the insurer down to 77% from 92% according to

Bloomberg

.

AIG will use $550 million of the money it raised through the share shares to pay investors who lost money on share price declines relating to a 2004 accounting inquiry by then-Attorney General Eliot Spitzer,

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Bloomberg

reports.

The government had originally planned a sale of as much as $20 billion, but scaled back its plans after it appeared the massive offering would drive the price too low,

Bloomberg

reported.

The government needs to get about $28.73 on average for its shares to break even on an investment of $47.5 billion. The bailout of AIG, including Federal Reserve funds, grew to $182.3 billion, according to published reports.

AIG earned $269 million in the first quarter ended March 31, 2011, compared to $637 million for the first quarter of 2010.

--

Written by Dan Freed in New York

.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.