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AIG Scandal

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Taylor McCammon

on 15 November 2012

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Transcript of AIG Scandal

What was the outcome? What Happened? AIG is one of the largest insurance and financial service companies. False accounting records mislead its investors into believing the company had a significantly better performance rating than it really did. The SEC accused AIG of intentional reckless structuring of transactions having no economic substance, that were designed only for the illegal purpose of positively affecting AIG financial statements. How Was it Illegal? Who was involved? AIG committed securities and mail fraud as a result of the accounting fraud.
On March 30, 2005 - AIG reveals that the reinsurance deal with Gen Re should have been accounted for as a deposit.
On May 31, 2005 - Restatement amounted to reduction in 2004 net income of 1.32 billion
AIG used reinsurance accounting; Gen Re used deposit accounting The Lehman Brothers
CEO, Robert B. Willumstad
Vice President, Jake DeSantis How did it affect our economy? American
Group A I G AIG had used $182 billion in tax payers money to be bailed out of debt
In the 4th quarter they had posted a loss of $61.7 billion When did it happen? September 16,2008 in New York City, New York AIG is now trying to rebuild their buissness so they can eventually sell it to china after they build it to a point that it is to big to fail. The company is looking at purchasing mortgages as investment vehicles.
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