Yes, seriously. The crooks who ran American Insurance Group (AIG) into the ground are suing for more money. They claim the government got too good a deal when it risked $182 billion to prevent the company from collapsing and bringing down the entire financial system with it. They're upset about the size of the ownership stake the government took, 92%. They're upset about 14% interest. They're upset about the money being used to pay off other companies, especially Goldman Sachs, 100% on really stupid risks (OK< I agree with them there). They're angry they weren't thrown into prison for committing massive fraud. Oh wait, that last one is me that's angry. My mistake.
Former CEO Maurice R. Greenberg, who should be known as prisoner 9205726 (I'm guessing at the number, and not feeling picky at all) ran a company that sold enormous numbers credit default swaps (CDS) it couldn't hope to pay off. A CDS is insurance against a borrower defaulting on a debt. If the debtor defaults, the seller of the CDS is responsible for paying the creditor. AIG sold naked CDSs, which means the buyer of the CDS wasn't the creditor, but just somebody who thought the debtor would default. It's like buying insurance on someone else's house because you think it will catch fire. You can't do that of course, but if you think a loan will go bad, even though you're neither the lender nor borrower, you can buy a CDS for it. AIG sold loads and loads of these CDSs even though it could pay off on very few, so as the economy spiraled down during the 2008 recession, more and more of those debts went bad.
The one valid complaint is the government used AIG as a backdoor bailout, because a lot of the money was used to pay off AIG's CDSs in full, the biggest beneficiary being Goldman Sachs. Without this payoff, maybe the octopus would have collapsed too.
Still, it was the crooks in charge at AIG who sold these CDSs, leading buyers to think they had assets they didn't have, and payoffs coming that they didn't have, meaning they're broke too and can't lend or borrow, and well, you all remember that mess well enough I'm sure.
Is 14% interest usurious? It's less than consumers pay on their credit cards, even though credit card companies are taking a lot small risk than the government took. Even looking at it as unusually high, lenders demand higher interest rates to make riskier loans, and considering $182 billion was at risk, and maybe the whole economy, Greenberg should have paid his 14% without complaint, though maybe with a kick in the head to start each morning.
So the AIG board has to seriously consider it, despite the enormous PR hit they're going to take if the join the suit, because if Greenberg extracts yet more billions from the government, AIG could be sued by shareholders for not joining the suit and getting them a cut of the ill-gotten gains. A New York judge already threw out the suit, but, and I case this goes with being a stinking rich plaintiff, they sued in Washington too and that suit still lives.
Is there something different about Wall Street? Let's just say that it's hard to imagine an auto company suing over its bailout. They at least seem to have the sense to realize they wouldn't still exist without the government saving them.
Maybe some statute of limitations protects the banksters (we need a similar word for the Wall Street crooks in insurance) from prosecution, which would explain suing the hand that fed them --- and clothed them --- and housed them --- and took a bullet for them --- but surely it isn't too late to break them up.