Tuesday, August 02, 2011

The White-Collar "Non-Crimes"

No jail, no convictions.

This is actually a pretty old case: in late 2000 and early 2001, AIG worked out a deal with Warren Buffett’s Gen Re to bolster AIG’s loss reserves by a finite reinsurance contract that prosecutors are pretty sure was a scam. In particular, prosecutors argued, and a jury agreed, that there was no genuine reinsurance and no risk of loss in the transaction, so AIG improperly accounted for it to boost its loss reserves and make Wall Street analysts happy. Prosecutors figured this out in 2005, and naturally leaked their suspicions...

Convictions overturned by 2nd Circuit.

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