American International Group (AIG) attorneys are in the process of reviewing whether the insurer may recover funds tied to transactions with Goldman Sachs (GS), Robert Benmosche, the firm’s chief executive officer said today at AIG’s annual meeting in New York.
Bloomberg: “We have fine lawyers, we are looking at all of the activities that occurred,” Benmosche said after a shareholder asked about deals with Goldman Sachs. “To the extent we find anything that was done wrong, or any harm to AIG that should not have happened, our legal staff will take appropriate actions.”
The giant insurer, which in 2008 reported almost $100 billion in net losses as a result of collateral calls from Goldman and other investment firms, is currently looking into CDOs and residential mortgage-backed securities it previously bought or insured for any evidence that the structures were designed or sold fraudulently by Goldman Sachs.
If there is any evidence that the instruments were sold without adequate disclosures, the insurer could file claims to recover money.
AIG has been under constant public scrutiny after receiving over $120 billion in taxpayer assistance. Any money that the co. could recover from lawsuits over fraudulent deals could certainly improve its chances of paying back the government.
Goldman Sachs received nearly $13 billion related to CDS and securities-lending contracts that government-controlled AIG wound down after its government rescue.