Two of the AIG's top managers in Paris , have resigned , just days after agreeing to return the controversial retentiob bonuses . The news of more disension at AIG comes a day after Jake DeSantis, an executive in insurer's financial products division, publicly resigned in an Op-Ed column in the New York Times.
DeSantis said he plans to donate his bonus-742,000 after taxes- to charity. AIG said Mauro Gabriel, president and chief executive of Paris-based Banque AIG, and Jim Shephard, deputy chief executive, resigned from their roles March 20. The men "resigned from their roles given shared concerns regarding their ability to conduct business in the current hostile encironment toward Banque AIG and AIG Financial Product employees generally," AIG spokeswoman Christina Pretto said in an email to The Associated Press. AIG said both men have agreed to stay for a transition period, although for how long was not immediately known.
Status unchanged, Pretto's email came in response to a Wall Street Journal story that saud the resignations of the Paris employees could spark defaults on 234 billion of derivative transactions unless replacemennts for the two executives are found to the Wall Street Journal. Giving their commentment we believe the status of the Banque AIG drivative books will remain ungaged and good standing Pretto said.
According to the Journal report, if AIG fails to find replacements for Gabriel and Shephard acceptable to French regulators, the regulators can appoint their own disignee to manage the blank. Such an outcome could trigger defaults under the blank's derivative contracts since it would represent a chage in control.
A New Threat, A default could set off a chain reaction costing financial firms, including European banks that did busiess with AIG, billions of dollars- similar to what the U.S. govrnment was trying to prevent when bailing out the giant insurer. New York- based AIG has been heavily criticized by government officials and the public after it awarded $165 million in bonuses earlier this month.
The office of New York Attorney General Andrew Cuomo has also been investigating the retention bonuses, or payments designed to keep valued employees from quitting. The bonuses were given to employees of the financial products division, a global unit that issued derivatives called credit default swaps, which drove AIG almost to collapse last year.
by the associated press
No comments:
Post a Comment