AIG's Multi-Billion Dollar Accounting Fraud Explained

[@CommodoreFloopjack78]

"Insurance companies generate value and make money by charging thousands of customers on a monthly basis a certain and sometimes exorbitant premium for services said customer will likely never have use for, but on the off chance that a customer does file a claim for the sake of making use of the benefits for which they have been repeatedly paying for extended periods of time, the insurance provider will do any and everything it possibly can, up to and including litigation, to deny the claim and refuse the customer services at all costs."

[@BillyLapTop]

A true conflict of interest if there was ever one.

[@DumbledoreMcCracken]

@@BillyLapTop no different than any other business. Insurance companies hire good lawyers.

[@1janeybug]

Right Perhaps they should charge low premiums Then pay out claims without regard to actual legitimacy 😊

[@serioserkanalname499]

Well duh, someone has to pay all the insurance companies overhead. Obviously the vast majority of clients just loose money on this.

[@smarsville]

Did anyone go to jail? Should have gone to jail for a long, long time. A 42 year old in MO was just released for a robbery committed when he was 16. He was originally sentenced to a 112 years. No one killed although a gun was used and a person grazed. Very minor injury. A new law requiring minors to have a chance at release based on change and maturity saved him. These Wall Street crooks did far, far more damage to innocent retail people’s wealth. They are sickening and part of the corrupt elite club.

[@tomlxyz]

The problem is that for one it's much harder to pinpoint a fraud to a specific person while that's very easy with robbery

[@xman7695]

@@tomlxyz In which case some more people should get a few years and never work in their field again.

[@tma2001]

aye the rich pay fines while the rest of us go to jail - this infuriates me - in particular banks that are guilty of money-laundering. All the board executives should be barred from serving/running any company for life and their assets seized and sold off as part of the fine.

[@cris1735]

@@tma2001 If the penalty for a crime is a fine, then that law only exists for the lower class.

[@blackmanxrjc]

The CEO of Gen Re (Chris Milton) went to jail for 4 years, along with some other top executives. Hank Greenberg settled the civil suit against him in 2017 for $9.9M. The settlement required Greenberg and Smith to give up money they received as AIG performance bonuses during the years the fraudulent transactions were reflected in the company's accounting records. AIG itself was a defendant in a case initially brought in 2005 by then attorney general Eliot Spitzer. The company reached a $1.6 billion settlement of the case in 2006.

[@garygarside9782]

i could loose my job or go to jail for insurance fraud, but i guess if insurance companies comit fraud they get bail outs

[@davidallen8611]

This is literally the best channel on KZbin!!

[@TheDavidlloydjones]

Ouch! Damnation by faint praise at its worst!

[@richierich1835]

boot licking give you bad breath.

[@baconatorrodriguez4651]

The Ark with Richard Burnish though

[@stephen7497]

Imagine being a fly on the wall during their highest level board meetings and listening to one fraud scheme proposal after another

[@MBarberfan4life]

I read about this on AIG’s Wikipedia page, and I had never heard about it before. It’s funny how their stock declined over 99% after 2008. Still nowhere near where it was trading at in 2007.

[@jennerb7059]

I only knew about AIG's 2008 trouble. Thanks for making this video!...Actually I have seen over 8 documentaries on the 2008 crash.

[@stupidminotaur9735]

Same

[@Romiedahomie415]

Did u watch inside job

[@jennerb7059]

@@Romiedahomie415 yes I have seen it at least 2 times. I will watch it again.

[@sevensages5279]

Another great one is "Tax me if you can". It's a PBS frontline program. This covers large corporate tax dodgers.

[@jennerb7059]

@@sevensages5279 I'll watch it tonight

[@davidbeppler3032]

Steal $2k you go to jail, steal $2b you get a promotion.

[@xavierb4647]

It kinda makes wonder why aig still has buildings, I’m unsure if it’s across the country but I live in houston and they have a building here still about 2-3 miles away from downtown Houston

[@antennawilde]

Isn't this the standard operating procedure for all Wall Street firms, artificially inflating their stocks? I can't think of a single Wall St firm that isn't actively and openly engaging in widespread fraud.

[@williamlloyd3769]

Did AIG clawback CEO and CFO bonuses during period of accounting fraud?

[@xtbum3339]

Am no financial guru but am pretty sure some, if not most of the government bailouts went to upper management.

[@scottkirby5016]

This was one of the first scandals on Wall St that I paid attention to and tried to make sense of as I learned how the market functioned (or failed to), So yes I remembered it and will say this was a pretty good intro/flyby into the subject. Though a look at the corp governance and silo-ing of each business unit (for performance in spite of the units owning each other in a tangled web) could deserve a deeper look at it shows how the incentives drove many units to to falsifying outputs independently, and that this culture wasn't fixed and was in part responsible for the way the CDO/derivative insurance unit in London was handled that would get them into so much trouble not even a decade later.

[@fpl_bailey]

Such a underrated channel

[@richierich1835]

bum lickers looking for hearts

[@fpl_bailey]

@@richierich1835 shut up, as if hearts matter 😂. Unlike you, I show appreciation to quality content.

[@richierich1835]

@@fpl_bailey you never mention one word about the Content you Muppet 3 words is how much you Quality you gave it lol

[@funleague]

Insurance companies don't pay, they claim bankruptcy ! It is a 0-sum game, policy holders lose almost everything

[@williamlloyd3769]

Did AIG Board clawback CEO and CFO bonuses during period of the fraud?

[@10lauset]

Too bad those responsible didn't get serious jail time.

[@davidbeppler3032]

Financial crimes very seldom lead to jail time. Often the fines don't even equal 10% of the damage done. I am sure if board members spent years in jail for these crimes, they would stop today.

[@daddyteddy85]

Your channel is excellent

[@iFreeThink]

Lawsuits with financial/business entities are like "the real, trade wars."

[@docentofkathu]

And yet, after not one but two recent MAJOR financial scandals one of the biggest individual bailouts of all time people still trust these 🤡with their money (AIG are still the 4th biggest insurer in the US). 🤯🤷🏻

[@paulconner4614]

Wells Fargo is still operating despite numerous frauds also.

[@kjhomme6558]

I did hear of this because of their bid rigging scandal from the mid 2000s which also made headlines. That topic is quite interesting since it involved Marsh & Spitzer.

[@douglassauvageau7262]

Lloyd's of London (et al) pioneered the concept of 'shared-risk' for the emergent shipping industry. Peripheral to this concept was capital-investment of funds held in trust. Central to this concept was the development of 'standards' by which policyholders might join this consortium of 'shared risk', and standards by which consortium funds might be loaned.

[@ZATennisFan]

This is yet another example of measurement driving behaviour. Has it never occurred to anyone that the “market” continuously pushing companies and businesses to increase profits and maintain growth rates will almost always lead to this type of behaviour?

[@applelandry4233]

I didn't remember this. But, more importantly, did anyone go to jail? If not, what would prevent anyone from doing this again? Telling the CEO and CFO, after they've made their bonus money, they're fired isn't a big deal. If no CPA's, lawyers or other licensed professionals lost their licenses, this was little more than publicity and a loss to the investors.

[@paulconner4614]

For the most part the Wall Street CEO's and CFO's were handed large bonuses to fix the problems they caused. I used to say people should hire me as a CEO as I can screw up just as good as any of them and will gladly take a 40 million golden parachute to leave.

[@choonhuitan6]

When I asked my Financial Advisor in 2007 , did AIG have any CDO...he said AIG did not. I lost money on buying AIG shares.

[@KbRonG]

What I found interesting about AIG is that only Greenberg could understand in 2008 how everything fit together and was brought back in to work through the financial problems

[@nicolasmaldonado1428]

Even fraud is boring in the insurance industry.

[@sunnycorax]

Man if only people thought of this 15 years later them blowing up during the GFC wouldn't have been so surprising.

[@Tinfoiltomcat]

Phew, the music is back ☺️

[@DrDuckMD]

Insurance companies piss me off. They actively try to not pay out.

[@willdehne1]

A warning to others. On the advice of our financial advisers (Merrill Lynch) we transferred a large annuity from Metropolitan to AIG in 2007. The reason given was the better terms and a large sign-on bonus. We had no means to know the financial manipulations of AIG. We learned of the trouble AIG was in one year later. The Government bailout saved us. There must have been many folks like us. I agree we should have been suspicious of the generous terms offered by AIG. We got lucky. BTW, Merrill Lynch got in trouble shortly after also. Our ML advisors are no longer there.

[@felixsunga7059]

I knew about AIG 2008 crush thanks alot for your informative video i use them to educate the upcoming teens and even me😊👍

[@MysticalFalcon]

Sven, thank you for all the work you put in amd the knowledge you have passed on. Over recent years, buybacks seem to be managements preferred method of returning value to shareholders given the improved flexibility. that being said, i wonder how different the yield would be if buybacks were added in

[@hume1234561]

These revenue frauds all follow a distinct pattern.

[@brasil-z4u]

I LOVE THIS CHANNEL

[@endoetz]

most insurance companies in indonesia mostly went bankrupt due to corruption, therefore scamming their customers by not paying their claims. for example: Jiwasraya, Bumiputera, Kresna Life.

[@PubliusUSA]

Insurance company landlords? Extortion and fraud have no limits in insurance racket.

[@MorrisFilmPhoto]

Thanks 4 a Great Video!

[@johnl.7754]

Well they needed that 500 million in 2008

[@jessekauffman3336]

Share holder companies need to be legislated better. Greed controls them all

[@calamorta]

"B-but regulation is what prevents other companies from existing!!! If we had more competition, AIG wouldn't be able to be this greedy without losing profit!!!"

[@jessekauffman3336]

@@calamorta sounds like a brilliant idea, why didn’t they think of it lol

[@flynancialanalyst]

I did not know. Great vid

[@michelbruns]

When you can get sued because of the ice etc. You mentioned, maybe you should fix your legal system first

[@fernandoschmidt8]

Gen Re was punished in which way for its participation in this fraud?

[@jasondonovan3062]

Hank Greenberg, Ed Matthews, et al. are all business and insurance gods! Long live CV Starr!!!

[@blackfreud9048]

This is all well and good, but why didn’t any fraudster go to PRISON?

[@davidjma7226]

They invest the GWP in equities. This makes up over one quarter of insurance companies' profits!

[@Davidjune1970]

Executives should have wages and stock holdings garnished garnished for criminal and fraudulent use of corporate resources. Penalty should be equal to the amount of the fraud and damages caused. Then they should be fired and jailed for the crime with a ban of ever being in a leadership position of a publicly traded corporation again

[@ProfAzimov]

I like the way you think, mate.

[@DwayneBennett]

How many went to jail?

[@goneutt]

A part of a billion sounds small today

[@xman7695]

Why does this sound so much like what companies in china (like Evergrande for example) are doing right now?

[@joechang8696]

basically, tell analysts to piss off, and just run your business

[@audijohnson9732]

Damn I have a structured settlement through AIG

[@eddyeroyal6024]

I wished i had purchased the stock

[@iFreeThink]

Some people major in Math without teaching. That's weird...

[@Romiedahomie415]

Great video im investing myself with acorns let me know if ur opinion Wall Street bets

[@GroovyVideo2]

crooks

[@chuckinhouston9952]

Not very well explained. Insurance reserves are not cash reserves, but accounting entries. Debit loss expense, credit reserves. No cash.

[@jaydoubleli]

this is why i dont buy insurance

[@DumbledoreMcCracken]

To the Moon!

[@iFreeThink]

Insurance people and... Like religious leaders. Like mortuary science people.

[@charleschaz8255]

no I didn't. would you mind releasing 15 films a day please?

[@AlsoKnownAsUzi]

coool stuff

[@Matt-xt1rv]

Your need a new mic bro a blue snowball is $50 and sounds better than what your using

[@iFreeThink]

Law schools have another route after law school if you studied something STEM. They're very Pro-thinking, but they're too open to people like my husband who don't have the accurate information/academics.

[@walrusdestruction6845]

Can you please go to the dollar store and spend 4.99 on a better mic

[@rdxzero]

Come on man. Everything's perfect except your mic situation lol.

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[@tma2001]

send me your bank details - I know of a Nigerian bankers ex-wife who has just the deal for you!

[@ClimateKiller]

interesting video, hadn't heard of that scandal before

[@bossladyyoungblackandambitious]

I'm currently insured with this company

[@bossladyyoungblackandambitious]

By the way we're day's away from 2022. I didn't hear anything current.