In 2008, the government offered an $85 billion bailout to American International Group Inc., one of the world's largest insurance companies, in order to prevent its collapse. When AIG accepted the bailout, it waived its right to sue banks over most of the mortgage securities that it had acquired. But, it did not give up its right to pursue legal action regarding $40 billion of mortgage bonds it purchased directly from banks. In an exclusive story for The New York Times, finance reporter Louise Story explains how AIG is now going after hedge funds and banks to try to recover billions in losses related to mortgage securities that caused the financial collapse in 2008.
And since the federal government now owns 92% of the insurance company, this could have a positive economic impact on the American people.