FOR IMMEDIATE RELEASE
Thursday, December 17, 2015
Contact: Jeff Gohringer, 202-618-6430 or jgohringer@bettermarkets.com
Better Markets Goes to Court to Make Clear that AIG’s Former Executives and Shareholders Don’t Deserve Another Nickel from Taxpayers
**View the fact sheet, motion, and brief**
Washington, DC — Better Markets announced today that it has filed a motion in the U.S. Court of Appeals for the Federal Circuit seeking leave to submit an amicus brief supporting the government’s position in Starr International Company v. U.S. The appeal arose after former AIG CEO Hank Greenberg decided to challenge the outcome of the trial in which the Court of Claims sided with him on liability but awarded no damages. The Better Markets brief makes clear that AIG executives and shareholders do not deserve another nickel from taxpayers after they bailed out the insurance giant during the 2008 financial crisis. Better Markets is the only public interest organization to weigh in with an amicus brief in the case.
“AIG would not exist today but for a $182 billion government bailout and U.S. taxpayers assuming the unlimited risk of AIG’s massive derivatives book. AIG’s shares would have been worth zero but for that taxpayer bailout. The appeal court should reject the legally meritless and grossly unfair claims of AIG’s former CEO that the bailout was not generous enough to AIG’s shareholders. The appeal court should also reject the baseless assertions of the lower court that attempts to re-write history by making the ridiculous claim that the government in rescuing AIG was the villain and that AIG was the victim. The families of America were the victims of AIG and they shouldn’t be re-victimized by having to pay yet more money to AIG’s undeserving shareholders,” said Better Markets President and CEO Dennis Kelleher.
“It’s also vitally important that the appellate court reject the claims of AIG’s former CEO to help end the all too pervasive sense among the dangerous too-big-to-fail firms and their executives that they can engage in reckless behavior to generate massive profits regardless of the consequences and costs to taxpayers,” said Mr. Kelleher.
Starr International Company is suing the United States for more than $30 billion based on the absurd claim that the $182 billion bailout of AIG wasn’t generous enough. While AIG has spent millions of dollars in advertisements thanking taxpayers for the bailout, Starr – the largest shareholder in AIG before the crash – is seeking tens of billions more from taxpayers.
Starr has advanced a number of far-fetched legal theories, and persuaded the Court of Claims to buy into one of them. Earlier this year, after a lengthy trial, the court found the government liable for a regulatory “exaction” because of the terms of the emergency loan that the company voluntarily accepted rather than filing for bankruptcy. If this erroneous decision is affirmed, not only will taxpayers have to hand billions more to AIG’s former officers and shareholders, but U.S. officials in the future may be inhibited from taking necessary action in the next crisis.
Better Markets’ brief highlights how the trial court misinterpreted the Federal Reserve Act, and made an irrelevant and erroneous factual finding—that AIG was less culpable but treated more harshly than other financial firms. The brief also provides important historical context about AIG’s reckless pursuit of profit, and it identifies pervasive bias in the lower court opinion, which describes AIG as a passive victim of a predatory government.
Fortunately, the trial court also held that Starr suffered no damages at all, because absent the taxpayer bailout, AIG shareholders would have been wiped out in bankruptcy, left with no share value whatsoever. Better Markets’ brief also urges the appellate court to uphold this ruling.
Starr does not want the Federal Circuit to consider these important arguments in support of the public interest and has decided to oppose Better Markets’ submission of an amicus brief.
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.
