Who was on the grassy knoll with AIG?

  @FortuneMagazine August 29, 2013: 7:06 AM ET
ANN16 hank greenberg

Hank Greenberg


AIG is the great whodunit of the financial crisis. From the start, it was a surprise that the insurer was even among the firms in need of a rescue, having seemingly little in common with an investment bank. But AIG had essentially insured a vast swath of Wall Street's riskiest bets -- $441 billion in securities, $58 billion of which involved subprime loans, according to Bloomberg -- which it would cover in case of an unlikely cataclysm. When the Lehman tsunami hit -- sandbagging not just Lehman but most of the other big Wall Street firms -- AIG was stretched too thin to backstop all those investments.

The New York Federal Reserve and the Treasury Department entered the fray, and the conspiracy theories began in earnest. Did they save AIG or sacrifice it? AIG got $182 billion in government loans, and in exchange Uncle Sam got 92% of the company.

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