NY Attorney General to Investigate AIGs CDS Contracts

NY Attorney General Andrew Cuomo said Thursday afternoon that he was widening his investigation of the AIG.

“Our investigation into corporate bonuses has led us to an investigation of the credit default swap contracts at A.I.G.,” Mr. Cuomo said in a statement. “CDS contracts were at the heart of A.I.G.’s meltdown. The question is whether the contracts are being wound down properly and efficiently or whether they have become a vehicle for funneling billions in taxpayers dollars to capitalize banks all over the world.” [via NYT].

Mr. Cuomo said will examine whether AIG trading counterparties improperly received billions of dollars in government money from the struggling insurer. Those counterparties include Goldman Sachs, which received $12.9 billion, as well as Société Générale and Deutsche Bank, which each received nearly $12 billion.

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