Matt Levine, Columnist

Bailout Lawsuits and Trader Chats

Also: SEC trading, insider trading, worry worries and millicorn etymology.

May 10, 2017 at 1:30 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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AIG.

In 2008, the U.S. government bailed out American International Group, Inc., and got back in exchange a 79.9 percent equity stake in the company. Eventually AIG got better, and some of AIG's previous shareholders, who saw four-fifths of their stakes effectively wiped out, thought that they had gotten a bit of a raw deal. The most aggrieved shareholder was probably Maurice R. "Hank" Greenberg, a former chief executive officer of AIG whose firm, Starr International Company, Inc., was one of AIG's biggest shareholders. Starr sued the government, and in 2015 it sort of won: A federal court ruled that the government had cut some corners (and violated the Federal Reserve Act) in crafting the AIG bailout. But it also awarded Starr no damages for the government's illegal taking, because if it hadn't happened, AIG would have gone bankrupt and Starr would have been left with nothing anyway.