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Investigators looking into collapse of AIG

The collapse of American insurance giant AIG has become the subject of a serious fraud office investigation into the company's London branch. The collapse of the American giant was one of the largest in corporate history and many believe was the one main event which led to the collapse of the worldwide economy.

While the company itself was involved in all areas of the insurance market, the SFO is taking particular interest in AIG financial products which sold complicated "credit default swaps" which effectively ensured corporate entities against companies not paying their bills. The head of the operation, Joseph Cassano, is said to have earned a total of £200 million during his time with the company. As the credit crunch began to grab hold of the world and the corporate market, the group announced losses of £8 billion.

While there is no detailed explanation of exactly what the SFO is looking for there is no doubt they will be checking whether the relevant regulatory framework was in place and if appropriate investment instruments were sold to appropriate clients. In many ways this is a case of "locking the stable door after the horse has bolted" but there are hopes that it could help to avoid a similar situation in the future.

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