AIG Subpoenaed on Credit Default Swaps
American International Group
(AIG) - Get Report
has been subpoenaed by New York Attorney General Andrew Cuomo for information about its credit default swaps program, according to news reports citing anonymous sources.
Cuomo is already investigating
plan to distribute $165 million in bonuses to executives in its financial services division. The move has received harsh criticism from the public and lawmakers because the company received more than $170 billion to deal with toxic CDS assets the division was responsible for.
AIG has said it needed to retain some of those employees to wind down the complex securities. Cuomo is seeking more information about how that operation has gone down for the past seven months,
Reuters
reports. All but five of the top 20 bonus earners at AIG have returned their payments from last year amid the public outcry. Two top managers of AIG's operations in France resigned on Thursday after another executive in the U.S. division published a scathing resignation letter in
The New York Times
.
Cuomo has also issued subpoenas to
Bank of America
(BAC) - Get Report
and
Merrill Lynch
regarding the distribution of bonuses immediately before BofA received $20 billion in government funds to seal its acquisition of the ailing investment bank. He is investigating other aspects of the financial crisis for potential malfeasance as well.
