Feds May Finally Be Ready to Put the Screws to Joe Cassano

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Federal prosecutors may finally, maybe, be putting together a jury to consider an indictment of Joe Cassano, the former AIG Financial Products head who piled AIG into the risky derivatives that nearly brought the insurer down, the Wall Street Journal reports today. Why all the hesitation and qualifiers when everyone — including AIG interim CEO Ed Liddy and all Cassano's former employees — has been pointing the finger at him for over a year?

Well. Per the Journal:

For the Justice Department, the difficulty in these cases has been the higher criminal bar of proving the firms intended to defraud investors, people familiar with the cases said. Financial-industry representatives and defense lawyers said executives were dealing with an unprecedented catastrophe, and they had no intent to mislead investors, even if statements turned out to be wrong.

Apparently, there are tape recordings of Cassano and the other folks in the FP unit talking about the derivatives, and probably the feds have been contrasting the statements Cassano made in those private conversations with the statements he made publicly, looking for discrepancies, but come on: It's been eighteen months. If there were recordings out there in which Cassano et al. were saying they were sick to their stomachs or talking about the "crap" they were buying, we kind of feel like we would have found out by now. Which begs the question: Which would be more angry-making? Finding out that AIG's big villain had criminal intent, or finding out that, actually, he was just criminally stupid?

Prosecutors Are Poised to Impanel AIG Grand Jury [WSJ]