Forum Post: A 1% company sues the US Treasury and the Federal Reserve
Posted 12 years ago on Nov. 22, 2011, 9:31 a.m. EST by HarryCrew07
(433)
This content is user submitted and not an official statement
This article is about AIG suing over property rights. Very interesting.
Good post. Thanks !
I was wondering when this would happen. We put the AIG assets under the Maiden Lane accounts at the NY Fed. The strategy of they're following is pretty compmonplace for them; they put the trouble assest on their books then wait for the company to recover and slowly feed the assets back out onto the market. They make a handy profit in doing so.
You can see the Maiden Lane accounts at http://newyorkfed.org/markets/maidenlane.html . Note the slow sell-off as AIG's health and market value returned.
The lawsuit is saying, "Hey! What if I the shareholder was planning to do exactly what you did?" I believe (not sure) the hole in their argument is that the NY Fed bought the shares on the open market. If they didn't then they basically stole them from the shareholders, and that would be grounds for a lawsuit. It will be interesting to watch this develop.
I notice ome folks below are saying, "Ha! They're suing the Federal Government!" That's inaccurate. Only the Governing Board of the Federal Reserve is an agency of the Federal Government. The regional banks are private banks operating with special powers under broad, non-specific, authority delegated to them by the board. I'm not sure they'll be able to attach to the government in this suit... the connections are too loose.
Note, by the way, that there could likely be a hefty lawsuit coming from Bank of America. There is documentation showing that we (the Fed, FDIC, and Secretary of Treasury) arm twisted them into buying first Countrywide then Merrill. We then passed laws that made holding those assets (particularly Merrill) very unattractive. I think the reason why the Fed is giving BoA so much leeway in moving bad assets from Merrill to their banking arm is because we know we are largely responsible for their condition. At some point, however, I wouldn't be surprised if we don't see a lawsuit from them.
LOL Greenberg is the guy that came up with the idea for the Credit Default Swaps at AIG that caused the gigantic problem that needed a bailout---nervy guy. Most of the swaps were sold after Greenberg got the boot, by guys who had no idea of the risks, but he was the prime mover. Bring back Glass Steagall http://thomas.loc.gov/cgi-bin/query/z?c112:H.R.1489.IH: Help get guys like Greenberg off welfare
Previous American International Group CEO Hank Greenberg is suing the U.S. government, reports the Wall Street Journal. Greenberg and his current company Starr International has filed a $25 billion discrimination lawsuit in Washington, D.C., that asserts that the government didn't have the right to take over the failing business, but should have floated bailout funds instead. Read more here: https://personalmoneynetwork.com/moneyblog/2011/11/22/aig-ceo-sues-government/
You should fix that "suing the federal govt't" part. The Federal Reserve is PRIVATE. It's not owned by our government.
My bad, they are suing both the US Treasury and the Federal Reserve
Partial truth. The policy making body of the Federal Reserve, the Governing Board, is a US government agency operating under powers deletaged by Congress. The member banks starting at the regional reserve banks and flowing all the way down to your local bank are private, but they have to operate according to the laws, regulations, and policies of the various agencies defined by Title 12 of the US code (USC Title 12, see http://www.law.cornell.edu/uscode/usc_sup_01_12.html ).
that partial truth is that tiny nugget that puts confidence into the people.. they're there just like obama is president.. puppets.. and i highly doubt that they follow any of those regulations.. as we've seen from past scandals involving bernake
Please post some factual information to substantiate the claim that the Federal Reserve Board members are "puppets" or that Bernanke is anything but a reputable scholar in the field of economics. By "factual information," I mean something other than a blogger, an op-ed bit, or a you-tube video. I'm willing to agree with you, but I need some facts.
By the way, I compiled the shopping guidelines from a forum post and hosted them at http://bit.ly/vof9WH so they'd be widely accessible and sharable via social networks. Check them out and, if you agree, spread the http://bit.ly/vof9WH link as far and wide as possible; we need a LOT of folks on-board if we're to have an impact !
Most people have no idea about that because they associate paper money with government. Cognitive dissonance.
Though in this case, it was not that reason. AIG is actually suing both the Federal Reserve and the US Treasury Dept. Sorry to be confusing.
HarryCrew07
Very interesting article that you refer us to. I just have one suggestion, click on the http:source and read the article for yourself.
You evidently didn't understand who is suing whom and why, when, when or how. YOU are actually more interesting that is the article.
Here: "Former AIG CEO Maurice "Hank" Greenberg's current company -- Starr International -- filed lawsuits Monday in two federal courts against the Treasury Department and the Federal Reserve Bank of New York."
here: "Starr International was the largest shareholder in AIG. It is suing on behalf of AIG and the AIG shareholders"
And Here: ""The government is not empowered to trample shareholder and property rights even in the midst of a financial emergency," Starr International says in the suits."
That covers all the things I mentioned.
Thanks for thinking I'm interesting. What exactly is your confusion?
Between your one sentence interpretation and the details of the article itself. You stated the general truth but not the stated one.
Sorry to be so confusing. I just wrote a quick blurb and left it up to people who read the article to form their own interpretations. I'm certainly not going to be responsible for all of the different ways people can interpret things. Though I don't discourage different opinions, I don't appreciate condescending attitudes.