A bizarre attempt by New York Attorney General Eric Schneiderman to object to a the settlement between former American International Group (AIG) chief executive Hank Greenberg and AIG shareholders has been blocked by U.S. District Court Judge Deborah Batts in New York.
Schneiderman is involved in a separate case against Greenberg that was launched several years ago by then-Attorney General (later Governor) Eliot Spitzer. As Breitbart News reported last year, that case was troubled by questions about "missing" emails that may have revealed Spitzer's personal or political motives.
Judge Batts dismissed Schneiderman's intervention in a class action settlement that stands to benefit shareholders on the grounds that the State of New York lacks legal standing to object. The settlement was reached by Greenberg with AIG shareholders several years before the 2008 financial crisis.
Now, an emboldened AIG--in the midst of an advertising campaign thanking American taxpayers for bailing the company out in 2008--may join Greenberg's lawsuit against the federal government over the bailout terms. (Though Greenberg left the post of CEO at AIG in 2005, he remained a shareholder in the company.)
As Reuters reports:
Greenberg, whose Starr International owned 12 percent of AIG before its near-collapse, has accused the Federal Reserve Bank of New York of using the rescue to bail out Wall Street banks at the expense of shareholders, and of being a "loan shark" by charging exorbitant interest on the initial loan.
Meanwhile, the federal government continues to dodge the blame for the subprime mortgage crisis and the subsequent financial meltdown, using its power to encourage settlements such as a $20 billion agreement reached yesterday between government-backed Fannie Mae and major banks over mortgage repurchases.
The banks, eager to put controversies behind them, pass costs on to shareholders and consumers, while the federal government's ongoing failures in housing and finance remain largely unexamined and unpunished.
Greenberg, for one, is not taking the abuse, and is determined to defend shareholders--and his legacy.