"The Federal Reserve Bank of New York [NYFed] told [AIG] not to disclose key details of their agreements to make big payouts to banks in the insurer's regulatory filings in late 2008, according to a set of email exchanges released Thursday. ... Congress also pressured the insurer to release the names of banks that were paid off in full on $62 billion in bets on soured mortgage securities. The biggest payouts went to French bank Societe Generale and to Wall Street firm Goldman Sachs Group Inc., AIG finally said publicly in mind-March 2009. ... Buit a Treasury spokeswoman said Mr. Geithner wasn't involved in AIG's disclosure decisions, even though discussions about them took place in late November 2008, when he was selected as Treasury Secretary by President Obama [sic]. ... 'Our focus was on ensuring accuracy and protecting the taxpayers' interests during a time of severe economic distress,' Mr. [Thomas] Baxter said. ... Copies of email exchanges from late November 2008 to March 2009 between lawyers representing AIG and the [NYFed] were released by Rep. Darrell Issa (R., Calif.), ranking minority member of the House Committee on Oversight and Government Reform. ... In a Nov. 25 email, Peter Bazsos, an attorney at law firm Davis Polk & Wardwell [DPW] , which reprented the [NYFed], worte, that certain agreements 'do not need to be filed.' One agreement contained the names of banks that received payouts from AIG. A [DPW] spokesman declined to comment. In response, and AG in-house lawyer, Kathleen Shannon, said the company and its law firm Sullivan & Cromwell 'believe that the better practice and better disclosure in this complex area is to file the agreements.' She also wrote that the staff at the SEC 'would not be particularly happy with a decision to withhold the documents at this time'," Serena Ng & Michael Crittenden at the WSJ, 8 January 2010, link:
"New revelations that the government stopped the [AIG] from revealing information about its bailout had securities lawyers and policy makers buzzing on Thursday about whether the information had to be disclosed under federal securities law, and if so, what to do about the lack of compliance. Joel Seligman, a historian of the [SEC], said the disclosure rules were supposed to apply to all public companies, with only a few narrow exceptions for things lijke trade secrets and national security. ... The messages showed that in December 2008, AIG was prearing a filing to explain how it had eliminated a portfolio of derivatives , known as credit-default swaps, through an entity created with the Fed called Maiden Lane III. ... The Fed's lawyer, Ethan T. James of [DPW], deleted all references to the $10 billion in swaps that could not be torn up. He wrote in the margin: 'There should be no discussion or suggestion that AIG and the [NYFed] are working to structure anything else at this point'," Mary Williams at the NYT, 8 January 2009, link:
http://www.nytimes.com/2010/01/08/business/economy/08aig.html.
The documents should have been filed as Form 8-K attachments. Well Mary Schapiro, what will you do about this? Ban DPW from performing SEC services? If not, why not? If the Fed is not part of the US government it should not be able to sustain a "sovereign immunity" claim. Therefore, someone should have standing to sue it for triple damages under RICO. This case reminds me of Blake v. Dierdoff, 856 F2d 1365 (9th Cir., 1988), which introduced the "group published information" concept. Since one of Blake's attorneys was, drumroll please, William Lerach (WL), we know why the Feds had to get him. Hey Obama, here's an idea: pardon WL, then tell, not ask, tell, Preet Bharara (PB) to take WL as a special AUSA. Or are you afraid this might antagonize your Wall Street supporters? Even better, fire PB and replace him with WL. Let's plead the "group": AIG, AIG's officers, the NYFed, Vampire Squid (VS), DPW, some DPW partners and we'll see who else we can bring into this witches' brew. We know DPW, don't we? Sure, Linda Thomsen, former SEC enforcement director went from DPW to the SEC then back to DPW, my 28 April 2009 post: http://skepticaltexascpa.blogspot.com/2009/04/wsj-mistitles-article-2.html.
The documents should have been filed as Form 8-K attachments. Well Mary Schapiro, what will you do about this? Ban DPW from performing SEC services? If not, why not? If the Fed is not part of the US government it should not be able to sustain a "sovereign immunity" claim. Therefore, someone should have standing to sue it for triple damages under RICO. This case reminds me of Blake v. Dierdoff, 856 F2d 1365 (9th Cir., 1988), which introduced the "group published information" concept. Since one of Blake's attorneys was, drumroll please, William Lerach (WL), we know why the Feds had to get him. Hey Obama, here's an idea: pardon WL, then tell, not ask, tell, Preet Bharara (PB) to take WL as a special AUSA. Or are you afraid this might antagonize your Wall Street supporters? Even better, fire PB and replace him with WL. Let's plead the "group": AIG, AIG's officers, the NYFed, Vampire Squid (VS), DPW, some DPW partners and we'll see who else we can bring into this witches' brew. We know DPW, don't we? Sure, Linda Thomsen, former SEC enforcement director went from DPW to the SEC then back to DPW, my 28 April 2009 post: http://skepticaltexascpa.blogspot.com/2009/04/wsj-mistitles-article-2.html.
Well PWC, where were you when this happened? Why wasn't your 2 March 2009 opinon qualified as to inadequate disclosure?
1 comment:
Astounding to see a bunch of high powered guys "testify" that they didn't have any knowledge of how Vampire Squid's, ML and foreign banks were made whole.
Hank Paulson, who claims he was "trained to run towards problems", was floating around in "credit crisis oblivion" while the Fed announced:
On November 10, the Federal Reserve Board and the U.S. Treasury announced the restructuring of the government’s financial support to the American International Group, Inc. (AIG) in order to facilitate its ability to complete its restructuring process successfully. As part of this restructuring, under section 13(3) of the Federal Reserve Act, the Federal Reserve Board authorized the Federal Reserve Bank of New York (New York Fed) to lend up to $22.5 billion to a newly formed Delaware limited liability company (LLC) to fund the purchase of residential mortgage-backed securities (RMBS) from the securities lending portfolio of several regulated U.S. insurance subsidiaries of AIG.
Amazing!
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