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Thread: SEC Mulled National Security Status for AIG Details

  1. #1

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    Jul 2009
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    05-16-15 @ 12:32 PM

    SEC Mulled National Security Status for AIG Details

    SEC mulled national security status for AIG details | Reuters

    NEW YORK (Reuters) - U.S. securities regulators originally treated the New York Federal Reserve's bid to keep secret many of the details of the American International Group bailout like a request to protect matters of national security, according to emails obtained by Reuters.

    The request to keep the details secret were made by the New York Federal Reserve -- a regulator that helped orchestrate the bailout -- and by the giant insurer itself, according to the emails.

    The emails from early last year reveal that officials at the New York Fed were only comfortable with AIG submitting a critical bailout-related document to the U.S. Securities and Exchange Commission after getting assurances from the regulatory agency that "special security procedures" would be used to handle the document.

    The SEC, according to an email sent by a New York Fed lawyer on January 13, 2009, agreed to limit the number of SEC employees who would review the document to just two and keep the document locked in a safe while the SEC considered AIG's confidentiality request.

    The SEC had also agreed that if it determined the document should not be made public, it would be stored "in a special area where national security related files are kept," the lawyer wrote.

    More than a year later, the Fed's bailout of AIG remains controversial because it funneled nearly $70 billion to 16 big U.S. and European banks that had bought credit default swaps from AIG. Banks like Goldman Sachs Group Inc, Societe Generale and Deutsche Bank had bought those insurance-like derivatives to guard against defaults on hundreds of securities backed by subprime mortgages.

    Lawmakers on Capitol Hill have labeled the AIG bailout, in which the New York Fed created a special entity to purchase those securities from the banks at essentially their face value, a "backdoor bailout" for the 16 financial institutions.

    The new batch of emails, along with others that have become public in recent weeks, reveal that some at the New York Fed had gone to great lengths to keep the terms of the bailout private and the SEC may have played a role in contributing to some of the secrecy surrounding the AIG rescue package.

    In March, some of the secrecy surrounding the AIG bailout began to fall away when the insurer, under pressure from Congress and the SEC, agreed to publicly name the 16 banks that got money in the rescue package and how much each received.

    But AIG, largely at the prodding of the New York Fed, refused to make public all of the information in the controversial document, officially called "Schedule A -- List of Derivative Transactions," according to the emails turned over by the central bank to Capitol Hill. AIG continued to seek confidential treatment from the SEC for the redacted portions of the five-page filing.

    Last May, the SEC did grant AIG's request for confidential treatment for the remaining redacted portions of the Schedule A filing. The redacted parts include the CUSIP, or trading ID, number for each security on which AIG wrote a CDS contract, as well as the face value of each individual security that AIG had insured against default.

    The SEC agreed to let AIG keep that information confidential until November 2018 -- or the 10th anniversary of the bailout. Critics contend that without the redacted information, it is difficult to determine which of the 16 banks had held the worst-performing securities, and which banks originated the worst of the troubled securities.
    Last edited by The Prof; 01-25-10 at 09:12 PM.

  2. #2

    Join Date
    Jul 2009
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    05-16-15 @ 12:32 PM

    Re: SEC Mulled National Security Status for AIG Details

    Some observations, if I may:

    1. Obama the populist.

    2. LOL!

    3. His Treasury Secretary bailed out IN FULL all obligations owed by AIG, and many other mega-giants, rewarding grossly the richest men and women on the planet, all on the taxpayer's pallet.

    4. And Geithner's NY Fed, it turns out, succeeded in pressuring AIG and the SEC to keep details of their obscene bailout top secret, AS IF IT WERE A MATTER OF NATIONAL SECURITY.

    5. Indeed, if it weren't for internal emails uncovered by Reuters, terms of the treaty would STILL be untapped.

    6. At the same time the uber-rich are roundly recompensed, stockholders in Chrysler, like freckled stepsons, are ripped off 98 cents on each doubtful dollar.

    7. The taxpayer, constant sucker of last resort, gets squat, only larger liabilities.

    8. Even UAW, presidential pet, receives only 42% of what it's owed, on paper.

    9. But Wall Street insiders, ultimately influential, with Obama in the White House know no worries.

    10. THIS is what underpins the protests against Bernanke and Geithner from the likes of CBC, the Congressional Black Caucus, as well as principled, ie, pissed off progressives Bernie Sanders, Barbara Boxer, Russ Feingold...

    11. Rahm the Ram's outta here cuzza the demise of health care.

    12. It's the Nigerian on the airline that shoulda nixed Napolitano.

    13. Holder oughta be heaved due to his amateurish testimony before Lindsey Graham about moving KSM to Manhattan, as well as the overstrained AG's more recent remission in not consulting the administration's security team before moving Mutallab.

    14. Gibbs has got to go because, well, he's Gibbs.

    15. The stupidest of all Press Secretaries yesterday on FNS insisted that the true meaning of Massachusetts indicated increased support for Obama.

    16. Obama the populist---what a phony.

    17. Billions for the fattest cats and biggest wigs, all on the sly.

    18. Nix for normal Nates and Nells, and---typically---just more trouble for taxpayers.

    19. Bribes for old boys like Ben Nelson.

    20. Exemptions for insiders, like the SEIU, GM, F&F.

    21. A roofless restructuring of the government's home mortgage megaliths.

    22. Raising the debt ceiling ONE POINT NINE TRIL.

    23. The timing, meanwhile, behind this bombshell bannerhead, national security status for AIG, can only by now be described as Obamite.

    24. The same day the plastic populist is to speechify his State of the Union---like a latter day Bryan---House Oversight is to begin its investigation into AIG and the secretive SEC.

    25. You shall not crucify mankind upon this cross of arugula!

    26. And you better not show up at Golgotha in a pickup truck, even if it's a GM.

    The Prof
    Last edited by The Prof; 01-25-10 at 09:29 PM.

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