Criminal Charges Unlikely Against Joe Cassano And AIG

On WSJ: Federal Prosecutors Leaning Against Charges in AIG Probe

• Recently obtained evidence has prosecutors leaning against pursuing charges, though no final decision has been made by Justice Department prosecutors in Washington, these people said. A Justice Department spokeswoman declined to comment.

Say what? Omigosh! No criminal charges?

• CBS News reported on Friday that Mr. Cassano would meet with prosecutors and that prosecutors likely wouldn't charge him.
  
  Federal prosecutors had been focused on a December 2007 investor presentation in which Mr. Cassano and other AIG executives made reassuring statements and projected confidence about the firm's exposure to the mortgage crisis, people familiar with the matter have said.
  
  Mr. Cassano said at the conference that write-downs tied to the swaps had reached an estimated $1.6 billion. The authorities looked at whether Mr. Cassano should have disclosed to investors that that figure would have been higher by several billion dollars if not for the aid of a value adjustment AIG made, known as "negative basis," those people have said.
  
  Several months later, when AIG disclosed that PricewaterhouseCoopers found a "material weakness" in its accounting of the swaps, it said it would abandon the adjustment, according to company filings.
  
  As of last fall, authorities believed Mr. Cassano may not have properly disclosed the adjustment to PwC, people familiar with the matter have said.
  
  But in a series of meetings last fall, Mr. Cassano's lawyers insisted to federal prosecutors that he had been forthright about the adjustment, according to people familiar with the matter. Prosecutors have since obtained notes written by a PwC auditor from a November 2007 meeting that appear to show Mr. Cassano informed the auditor about the adjustment and its potential positive impact, according to people familiar with the matter. That would make it difficult to bring a strong criminal case against Mr. Cassano, these people said.
  
  The negative basis adjustment hasn't been prosecutors' only concern, but it has been a central issue.
  
  The Justice Department so far has had little success proving there was criminal wrongdoing at financial companies whipsawed by the extraordinary economic events of the last few years. In the first and only securities-fraud case against Wall Street executives in the wake of the credit crisis, two former hedge-fund managers at Bear Stearns were acquitted at trial after being accused of misleading their investors before their funds collapsed.

Sigh!

Firstly Joe Cassano story as told by Michael Lewis: Joe Cassano: The Man Who Crashed The World

So hopeless yet again and it does appears that the law is simply lacking.

http://news.yahoo.com/s/nm/20100403/bs_nm/us_aig_cassano_cbs

• AIG received a $182 billion federal bailout during the height of Wall Street's liquidity crisis in September 2008, when regulators feared that AIG's massive losses from complex transactions could crash the global financial system.
  
  "Sources tell CBS News that the criminal case against Cassano - once called 'the Man who Crashed the World' - has 'hit a brick wall,'" the network said in an exclusive story published on its website.
  
  Federal investigators have found no evidence that Cassano lied to his bosses or shareholders about AIG's financial problems, sources told CBS News, according to the exclusive story posted online.
  
  That means no one is likely to be held criminally liable for the company's downfall, CBS News reported.

And sadly who cares NOW?

Market is rallying worldwide and does anyone really care now about AIG?

Here's a simple exercise to do to test the popularity of this issue. Ask Google the phrase 'Crimanl Charges Against AIG'. How many hits? Just 745,000.

Now ask Google the phrase 'Criminal Charges Against Toyota'. How many hits? Only just 6,290,000.