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Cuomo Reopens Probe of AIG’s Cassano After U.S. Ends Its Case

Andrew Cuomo
Andrew Cuomo, New York attorney general, talks to other attendees prior to a speech by U.S. President Barack Obama speaks about financial reform at Cooper Union in New York. Photographer: Daniel Acker/Bloomberg

July 23 (Bloomberg) -- New York Attorney General Andrew Cuomo reopened his probe of former American International Group Inc. executive Joseph Cassano after federal authorities closed theirs, according to a person familiar with the matter.

Cuomo’s office held meetings with Cassano’s lawyers and AIG earlier this month, and are expected to meet again, the person said. Cassano, head of AIG’s Financial Products unit until March 2008, made derivative bets on subprime loans that forced AIG into a U.S. bailout.

Cuomo shelved a 2008 investigation of Cassano after federal authorities began probes. Now he wants to make an independent assessment of whether Cassano bears any civil liability for his AIG conduct, the person said.

The Wall Street Journal reported today that Cuomo had a “renewed interest” in Cassano, citing an unidentified person familiar with the matter.

The focus of the U.S. investigations was whether Cassano misrepresented the value of AIG’s portfolio of “super senior” credit-default swaps, which insured bond losses tied to the U.S. housing market. AIG, once the world’s largest insurer, received a $182.3 billion bailout after these bets went bad.

In May, a person familiar with the Justice Department investigation said after a two-year probe, there was insufficient evidence to charge Cassano. In June, Cassano’s lawyers said the SEC also closed its Cassano investigation.

“We think they realized that our client acted in good faith, kept his superiors informed, and was honest with investors,” Cassano’s lawyers, F. Joseph Warin and Jim Walden, of the law firm Gibson, Dunn & Crutcher LLP said in a June 16 statement.

Warin had no immediate comment on the renewed Cuomo investigation. Mark Herr, a spokesman for AIG, declined to comment, as did Richard Bamberger, a spokesman for Cuomo.

On June 30, Cassano defended the credit-default swaps blamed for the firm’s losses, according to remarks submitted to the Financial Crisis Inquiry Commission.

To contact the reporter on this story: Karen Freifeld in New York at

To contact the editors responsible for this story: Patrick Oster at

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