Posted on 12 Feb 2009
American International Group Inc.'s financial products unit, which brought the firm to the verge of collapse with bad bets on credit-default swaps, is being investigated by U.K. regulators for possible criminal conduct.
U.K. investigators are working with authorities in the U.S. who are conducting separate reviews, the Serious Fraud Office said today in a statement. The company is cooperating with the probe, which isn’t related to insurance operations, New York-based AIG said in a separate statement.
“We will use our full range of powers to seek information and to speak to those with an inside knowledge of the company’s operations,” said Richard Alderman, director of the SFO, in the statement. “It is right for us to look into the UK operations of AIG Financial Products Corp., to determine if there has been criminal conduct.”
AIG is unwinding the financial products business, which sold derivatives including protection on fixed-income investments and caused about $34 billion in write-downs since 2007. The U.S. government rescued AIG last year to reduce losses at banks that did business with the insurer.