Claiming Fraud in A.I.G. Bailout, Whistle-Blower Lawsuit Names 3 Companies

[Ichingcarpenter]

The first known whistle-blower lawsuit to assert that the taxpayers were defrauded when the federal government bailed out the American International Group was unsealed on Friday, joining a number of suits seeking to settle the score on losses related to the financial crisis of 2008.

The lawsuit, filed by a pair of veteran political activists from the La Jolla area of San Diego, asserts that A.I.G. and two large banks engaged in a variety of fraudulent and speculative transactions, running up losses well into the billions of dollars. Then the three institutions persuaded the Federal Reserve Bank of New York to bail them out by giving A.I.G. two rescue loans, which were used to unwind hundreds of failed trades.

The loans were improper, the lawsuit says, because the Fed made them without getting a pledge of high-quality collateral from A.I.G., as required by law. To cover losses of those engaged in fraudulent financial transactions is an authority not yet given to the Fed board,” said the plaintiffs, Derek and Nancy Casady, in their complaint, filed in Federal District Court for the Southern District of California.

The lawsuit names A.I.G., Goldman Sachs and Deutsche Bank as defendants, but not the Fed.


http://www.nytimes.com/2011/05/05/business/05aig.html?_r=1

[Ichingcarpenter]

1. Self kick but you know.. Eric Holder and all the wall street

thugs in this administration will love this.

I find the law they are using in the lawsuit interesting and valid.
You know it was a scam too but are afraid to say so.