Fraud Officers To Meet US Officials Over AIG Inquiry
Financial Mail (UK)
February 16, 2009
Serious Fraud Office investigators are to meet their US counterparts in the next few days as their inquiry into a British offshoot of troubled American insurance giant AIG moves into top gear.
The SFO will also meet representatives of the American parent company, which is understood to be keen for any irregularities at AIG Financial Products to be fully investigated.
The subsidiary, based in Connecticut, conducted much of its business through offices in Mayfair, central London, and is being investigated by the US Department of Justice and its financial regulator, the Securities and Exchange Commission.
On Thursday, SFO director Richard Alderman said: 'It is right for us to look into the UK operations to determine whether there has been criminal conduct.' He added that the inquiry did not relate to AIG's mainstream insurance operations in Britain, but only to AIG-FP, which acted as the company's in-house financial services arm.
AIG-FP became a major supplier of 'credit default swaps' - insurance against the risk of borrowers defaulting on loans, including not only corporate debt but US sub-prime mortgages, the trigger for the August 2007 credit crunch.
With AIG-FP facing meltdown, the rest of AIG was running out of liquidity. In September 2008, the US government effectively nationalized the company.
Click here to return to FBIC homepage