NY AG Cujo
New York Attorney General Andrew Cuomo is barking loudly at execs of American International Group, threatening “significant legal ramifications” if they take bonuses for a job well done at the bailed-out insurance behemoth. Expect him to start bearing his legal teeth soon: fines, legal costs, penalties …
“Please inform my office as soon as possible what AIG plans to do with respect to executive bonuses and pay raises this year,” Cuomo wrote in a letter to the company’s chief executive, Edward Liddy. “As you know, I believe AIG’s decision has significant legal ramifications.”
So there’s the threat. Now what?
Remember Dick Grasso? The state of New York sued the former head of the NYSE over his nearly $200 million pay package. Grasso said he would give back $48 million in deferred pay if he got an apology. Four years later, it’s still not clear just how much he has been forced to give up.
In 2004, Grasso’s sin was a sign of the times. The supply of corporate largess far outstripped demand for outrage as the credit and housing booms made us giddy. Now, with taxpayers coughing up $700 billion in relief for the financial sector and around $150 billion being thrown into the black hole at AIG’s credit default swaps department, law enforcement can be expected to take on this compensation creature with a sharper set of teeth. Smelling their own blood, chiefs at Goldman Sachs and UBS have sworn off bonuses.
Deals of the Day:
* Struggling British sweets-to-CDs retailer Woolworths is in early-stage talks to sell its high-street business for what one industry source said was likely to be for a nominal sum.
* UniCredit’s Bank Austria is close to selling for 1.2 billion euros ($1.5 billion) profit-sharing rights in a vehicle that owns stakes in Austrian industrial firms, the Der Standard daily reported.
* United Internet has dropped its bid for rival freenet’s DSL broadband business, the company said.
* China’s Bank of Communications wants to invest $100 million in Taiwan’s Taishin Financial, as China and Taiwan work on a deal to boost investment between their financial sectors, media reported.
* Western Mining said it plans to purchase a 39 percent stake in Xining Special Steel Group from its parent for 1.1 billion yuan ($161.2 million).
(PHOTO CREDIT: Brendand McDermid/Reuters)