“AIG exploited a huge gap in the regulatory system” and its Financial Products unit operated without oversight as it made derivative bets on subprime loans, Bernanke told lawmakers in 2009. “This was a hedge fund basically that was attached to a large and stable insurance company.”
Benmosche has said he is preparing to be “Fed ready” at AIG and is targeting 2013 for reinstating a dividend if the regulator approves. AIG has posted four straight quarterly profits.
Bank of America Corp., Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc., and JPMorgan Chase & Co. were picked to manage the offering, the Treasury said. Greenhill & Co. was the department’s financial agent on the disposition of AIG shares.