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Treasury Sells AIG Stock

Hannah Madans |
December 11, 2012 | 2:18 p.m. PST

Executive Producer

AIG (Creative Commons)
AIG (Creative Commons)
The U.S. Treasury announced it would sell its shares of insurance company AIG.

The Treasury plans to unload the 234 million shares it owns at $32.50 per share. This will bring in $7.6 billion, according to the Daily Beast.

The Treasury's share in the company will drop from 92 percent in 2011 to 0 percent.

This will be one of Treasury Secretary Timothy Geithner's last acts.

The bailout of AIG, which resulted in the government owning the stock, caused some outrage. The Washington Post reported:

In September 2008, Geithner was part of the three-person team — which also included Treasury Secretary Henry M. Paulson Jr. and Fed Chairman Ben S. Bernanke — who led the bailout of AIG just a little more than a week after Lehman Brothers went bankrupt.

The initial bailout proved insufficient as the financial crisis worsened and losses grew at the firm, which had made wildly speculative and disastrous bets. In total, the Fed and Treasury together committed $182 billion worth of aid to AIG.

But the gargantuan size of the bailout was only one problem for Geithner when he joined President Obama’s Cabinet. The Treasury’s watchdog criticized the bailout of AIG for overly being generous.

And outraged exploded when word spread that AIG was planning to pay more than $100 million in bonuses to employees — including at the division that had made the bad bets that led to the firm’s undoing.



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