Friday, June 6, 2008
The Wall St. Journal reports that both the SEC and the Department of Justice are investigating whether AIG overstated the value of credit default swaps, which are contracts that insure against default of securities, including those backed by subprime mortgages. In February AIG announced that its auditor had found a "material weakness" in its accounting, and AIG has suffered two consecutive quarterly losses, the largest in its history, because of swaps-related writedowns. WSJ, SEC, Justice Scrutinize
AIG on Swaps Accounting.