AIG Back Under The Microscope


New York state's top legal officer plans to issue subpoenas to AIG over credit default swaps (CDS) contracts, a source familiar with the matter said.

According to a report published by The Times Online, ”Mr Cuomo is investigating whether AIG bonuses were paid fraudulently under New York law."

And the Wall Street Journal reported on its website that Cuomo is subpoenaing the information as part of an effort to assess AIG's claims the firm needed the expertise of employees to unwind certain contracts.

What does it mean for the market?

The news a few months back would probably have been bearish for stocks, explains Joe Terranova on CNBC’s Closing Bell. But it appears that today the market isn’t phased.

Stocks finished the day higher with investors much more focussed on fourth-quarter economic data and weekly jobless claims that were in line with expectations.

And as a result Terranova isn’t making any major moves; and he still has a bullish bias. “I believe this is a real market rally and that we have a defined bottom.”

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