AIG probe ends without charge

The US Justice Department has closed its two-year criminal investigation of AIG with no charges against the insurer or its senior executives, the FT reports.

In February 2008, AIG disclosed that its auditor, PwC, had uncovered a “material accounting weakness” related to the way AIG valued the portfolio of its financial products unit.

But federal prosecutors and FBI agents have found “insufficient evidence”.

Cassano statment

Joe Warin and Jim Walden, attorneys for Joseph Cassano, who ran the Financial Products division on which the allegations centred, released the following statement:

“Although a two-year, intense investigation is tough for anyone, the results are wholly appropriate in light of our client’s factual innocence. This result was the product of two things: an innocent client and fair prosecutors and agents. The system worked.”

David Brodsky and Richard Owens, attorney for Andrew Forster, the other principle target in the probe, said: “We were very pleased but not surprised to hear from the DoJ that they were dropping the criminal investigation of our client ... In the end, the facts were stronger than the emotions surrounding AIG’s problems.”

The Securities and Exchange Commission is investigating the same issues related to Cassano’s statements.