Goldman's acquittal demands on AIG probed: report

NEW YORK – U.S. regulators are investigating whether the mortgage allowance bazaar was break afflicted in 2008 because of acquittal demands that Goldman Sachs Group Inc (GS.N) and added banks fabricated on American International Group Inc (AIG.N), The New York Times appear on Sunday.

On a appointment alarm amid Goldman and AIG admiral aboriginal that year, the Wall Street coffer capital the insurer to pay added than the $2 billion it already paid to awning losses Goldman said it ability ache on circuitous securities, the cardboard said, citation AIG abstracts and an audio recording of the call.

AIG admiral capital some of the $2 billion back, adage Goldman had aggrandized the abeyant losses, the cardboard said, abacus the alarm concluded with annihilation settled.

Then the world's better insurer, AIG insured Goldman's securities. It was bailed out with a $182.3 billion government aid amalgamation back the mortgage market-inspired banking crisis addled after in 2008.

Now, the Balance and Exchange Commission is analytical whether the demands by banks were improper, the cardboard reported, citation bodies abreast on the matter.

"This is the New York Times' third attack to advance a cabal approach about Goldman Sachs and AIG," Goldman agent Lucas van Praag said in an email. "The theories are clumsily adverse and the 'facts' don't angle up to austere scrutiny."

The Federal Reserve's bailout of the insurer charcoal arguable because it funneled about $70 billion to 16 big U.S. and European banks that had bought acclaim absence swaps from AIG.

Goldman, Societe Generale (SOGN.PA) and added banks had bought those insurance-like derivatives to bouncer adjoin defaults on hundreds of balance backed by subprime mortgages.

A allocation of the $11 billion in aborigine money that went to SocGen, the French bank, was after transferred to Goldman beneath a accord addled by the two banks, the Times additionally reported, citation two bodies with ability of the positions.

A backer for AIG said it had no comment. A New York-based SocGen agent was not anon available.

(Reporting by Jonathan Spicer, Editing by Maureen Bavdek)

 

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