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Daily Outrage: AIG derivatives boss deflects blame for firm’s catastrophic downfall



WHO: From 2002 to 2008, Joseph J. Cassano led the AIG high-risk derivatives unit that’s widely accused of triggering the company’s $182 billion taxpayer-financed bailout and helping create the global financial crisis. He was unapologetic in recent written testimony to the U.S. Financial Crisis Inquiry Commission.

WHAT: Cassano told the feds it was AIG’s auditors who caused the billions in red ink by demanding premature write-downs on accounting losses that wouldn’t necessarily have cost AIG any real money. He claimed his team successfully negotiated lower customer demands for more collateral when the housing market tanked.

WHY IT’S OUTRAGEOUS: It was the Cassano division’s essentially worthless “credit default swaps” that the auditors very properly refused to hide in the company’s accounting reports. And they had to fight off AIG management in order to disclose the bad news.