Louise Story, finance reporter for The New York Times, co-reported on a big story in today's paper. In the fall of 2008, when the government propped up A.I.G. with billions of taxpayer dollars, the insurance giant was forced to forfeit its right to sue the very banks which helped drive it into the ground.
A.I.G. investors and executives alike have been frustrated over their lack of legal recourse against big banks, including Goldman Sachs, for insuring over-leveraged mortgage backed securities with them. However, after the Securities and Exchange Commission filed a civil suit for fraud against Goldman Sachs in April accusing the bank of misrepresenting a mortgage deal to investors. A.I.G. is now examining the idea of filing its own suit against Goldman. Was A.I.G. indeed misled by Goldman into insuring mortgage deals that the bank knew were flawed?
Louise Story has been following this story from the beginning. She tells us what there is to be learned from the A.I.G. waiver that was released last month by the House Committee on Oversight and Government Reform, and if it is damning for Goldman Sachs.