Yep he did. Keep pounding Jim, AIG policyholders need not also be bagholders too.
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Tag: Sham Reinsurance Transactions
Jim Brown Joins Slabbed in Calling Out AIG: You’re Insolvent and We Know It
Thursday, August 6, 2009
Baton Rouge, Louisiana
INSURANCE DYSFUNCTION CONTINUES
IN LOUISIANA
Press reports, both nationally and at home, have confirmed what financial analysists and investigators have known for months. Louisiana continues to have the most dysfunctional insurance system and the worst insurance climate in the country. In almost every category, insurance rates are the highest nationwide. And just last week, the New York Times published a front page investigative report on major financial trouble involving Louisiana’s largest insurance company.
The American Insurance group (A.I.G.) does more insurance related business in Louisiana than any other company. A.I.G. recently received the largest bailout in history. Yet serious questions are being raised about insider swapping of both assets and liabilities among numerous A.I.G. subsidiaries. The Times article says A.I.G. is selling way too much insurance. “State insurance commissioners are supposed to keep insurers from writing new policies if in doubt that they can cover their claims,” the article concludes.
One of the voices raising alarms is former Louisiana chief insurance examiner W.O. Myrick. He was quoted extensively in the Times article, and has looked at a number of A.I.G. subsidiaries that do extensive business in Louisiana. W.O. was of great help in my initial days of taking over a deeply troubled department back in 1991. He assisted me in shutting down some 50 insolvent insurance companies. So he knows the territory, and when he says there is potential trouble, you can bet on it.
Remember now that we are talking not only about Louisiana’s largest company, but one that so far has received over $210 billion in federal bailout funds. That’s a lot of dough in anyone’s book. How much? Figure that $700 for you and each member of your family goes from the tax till to A.I.G. And since the government has to borrow the money, add in 10% for the next 30 years. We ain’t talkin’ chump change here. Continue reading “Jim Brown Joins Slabbed in Calling Out AIG: You’re Insolvent and We Know It”
Thusday Music at the Do Slabb Inn
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Barack Obama You’ve Been Punked. AIG is a Massive Financial Fraud. Citizen Bloggers close in for the k(r)ill
The Smoking Gun: AIG, Corporate Ponzi Schemes, Sham Reinsurance and Denial. Consumers raped by sham reinsurance contracts.
This story is very fluid and rapidly gaining traction. In a nutshell Thomas Gober is absolutely right that AIG was a scam – for years! The real question is extent as this goes beyond just AIG as we’re relatively certain State Farm has similar problems as evidenced by their tangled corporate structure and nefarious connections to offshore Bermudan reinsurers. From the The Institutional Risk Analyst as we expand on Russell’s original post:
In fact, our investigation suggests that by the time AIG had entered the CDS fray in a serious way more than five years ago, the firm was already doomed. No longer able to prop up its earnings using reinsurance because of growing scrutiny from state insurance regulators and federal law enforcement agencies, AIG’s foray into CDS was really the grand finale. AIG was a Ponzi scheme plain and simple, yet the Obama Administration still thinks of AIG as a real company that simply took excessive risks. No, to us what the fraud Bernard Madoff is to individual investors, AIG is to the global financial community.
As with the phony reinsurance contracts that AIG and other insurers wrote for decades, when AIG wrote hundreds of billions of dollars in CDS contracts, neither AIG nor the counterparties believed that the CDS would ever be paid. Indeed, one source with personal knowledge of the matter suggests that there may be emails and actual side letters between AIG and its counterparties that could prove conclusively that AIG never intended to pay out on any of its CDS contracts.
The significance of this for the US bailout of AIG is profound. If our surmise is correct, the position of Feb Chairman Ben Bernanke and Treasury Secretary Tim Geithner that the AIG credit default contracts are “valid legal contracts” is ridiculous and reveals a level of ignorance by the Fed and Treasury about the true goings on inside AIG and the reinsurance industry that is truly staggering. Continue reading “Barack Obama You’ve Been Punked. AIG is a Massive Financial Fraud. Citizen Bloggers close in for the k(r)ill”
Tuesday Afternoon Music: Dedicated to Allstate, The Hartford and $enator Chri$ Dodd
Chris Dodd’s house of cards comes tumbling down……
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More Sham Reinsurance Deals and 50 Lashes with a Wet Noodle for the Perp
If you steal $5,000 from a bank using a weapon the penalty is sure, swift and severe. Steal millions from everyday American citizens and one of Chris Dodd’s Hartford based federal judge friends will slap you with a minimal prison sentence. Pull out a chair and find out about justice for the super wealthy and politically connected – Hartford style.
Let’s start at the National Underwriter and yesterday’s sentencing of General Re’s former CEO Ronald E. Ferguson:
Ignoring a government request that he serve significant time, a federal judge today sentenced former General Re. Corp. chief executive officer Ronald E. Ferguson to two years in prison for securities fraud involving a sham reinsurance transaction.
U.S. District Court Judge Christopher F. Droney in Hartford, Conn., also imposed a $200,000 fine and two years of supervised release on the 66-year-old executive.
Mr. Ferguson was ordered to report to a Bureau of Prisons facility on Feb. 18, 2009, if he is unsuccessful in arguments at a prior court hearing that he should remain free on bond pending his appeal of conviction to the 2nd Circuit U.S. Court of Appeals.
He was convicted in February with four other executives of a complicated reinsurance deal with a hidden side agreement that permitted American International Group to inflate its financial picture.
The other defendants convicted with Mr. Ferguson–who remain to be sentenced–are Christopher Garand (a former Gen Re senior vice president), Robert Graham, (Gen Re’s former senior vice president and counsel), Elizabeth Monrad (Gen Re’s former chief financial officer) and Christian Milton (former AIG vice president for reinsurance).
Last month, Judge Droney found that the scheme cost shareholders more than $500 million. The government said the amount was up to $1.4 billion.
The judge ruled that the defendants did not have to pay restitution, because attempting to locate the thousands of investors would delay the sentencing process.
I find it curious that Droney did not make Ferguson pay restitution Continue reading “More Sham Reinsurance Deals and 50 Lashes with a Wet Noodle for the Perp”
More Evidence of Slabberator Misuse: The Farm’s “Sham Transactions”, Zurich’s Sham Reinsurance Deals
Ladies and Gents if you or I were to do these things that insurance companies do regularly, a stretch in the federal pen would be a certainty so please do not try this at home. (H/T Steve, Mr CLS and unnamed others)
First let’s start at the National Underwriter to find out why Zurich is paying a substantial fine to the captured regulators at US Securities and Exchange Commission who could not ignore the “round robin” transaction:
Zurich Financial Services has paid $25 million to settle a securities fraud action by federal regulators over its use of phony reinsurance transactions to pump up its financial statements.
The Zurich, Switzerland based corporation, which admitted no guilt, said it had settled the civil case to “eliminate the burden, expense and uncertainty of potential enforcement proceedings.”
SEC’s action stemmed from company activity from 1999 through 2001 with a former Zurich subsidiary, Converium Holding AG (now known as SCOR Holding (Switzerland) AG). The company said, “None of the individuals responsible for these transactions has been employed by Zurich for several years.”
According to the SEC announcement, the company helped Converium with a fraud that involved the use of finite reinsurance transactions to improperly inflate Converium’s financial picture. Continue reading “More Evidence of Slabberator Misuse: The Farm’s “Sham Transactions”, Zurich’s Sham Reinsurance Deals”