Bernanke: I Wanted to Sue Aig to Halt Bonus Payments

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[Ben Bernanke] told lawmakers at a tense House Financial Services Committee hearing that he found it "highly inappropriate" for the bailed-out insurer to pay $165 million in bonuses to the very division that was "the primary source of AIG's collapse."

"I then asked that suit be filed to prevent the payments" Bernanke said. "Legal staff counseled against this action on the grounds that Connecticut law provides for substantial punitive damages if the suit would fail. Legal action does have the perverse effect of doubling or tripling the financial benefits to the (employees)."

"AIG highlights broad failures of our financial system," [Timothy Geithner] said. "We must ensure that our country never faces this situation again."

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Bernanke: I Wanted to Sue Aig to Halt Bonus Payments

Federal Reserve Chairman Ben Bernanke tells lawmakers he wanted to sue AIG to stop its bonus payments, but was told a lawsuit...

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