Judge throws out AIG lawsuit

City A.M. Reporter
A LAWSUIT by AIG’s former chief executive Hank Greenberg alleging the Federal Reserve Bank of New York broke the law during the 2008 government bailout of the failing insurance company was yesterday dismissed.

Starr International, once a large shareholder in AIG, argued the US acted unconstitutionally when it took 80 per cent of AIG’s equity.

But the US District court ruled the New York Fed did not have control or fiduciary responsibility just because AIG felt it had “no choice” in taking the bailout.