NEW YORK (Reuters) - New Jersey received the bonus details it demanded from American International Group and will probe whether the insurer, kept afloat with billions of taxpayer dollars, made misleading statements, a spokesman for the state attorney general said on Thursday.
“We are investigating whether there are any misstatements and unconscionable business practices,” said David Wald, a spokesman for New Jersey Attorney General Anne Milgram.
Any such wrongdoing might fall under the state’s consumer fraud laws. “It’s a very broad act,” Wald said.
He was unable to say what penalties may be triggered if wrongdoing is established.
The insurer’s decision to pay $165 million in bonuses set off a national furor because it stands to receive as much as $180 billion in public money.
The federal government’s drive to claw back executive bonuses appears to have eased, at least for now, which has pushed the states’ probes into the foreground of the bonus battle.
New Jersey, leading a 19-state coalition investigating AIG’s bonuses, is cooperating with New York Attorney General Andrew Cuomo. Cuomo’s separate probe has spurred some of the insurer’s executives to return their bonuses.
On Thursday, Cuomo was set to expand his inquiry by issuing subpoenas seeking information about AIG’s use of credit default swaps, a source familiar with the matter said.
New Jersey did not receive the names of the AIG executives who were paid bonuses, Wald said.
While AIG has also given Connecticut Republican Governor Jodi Rell similar information about its executive pay-outs, it has withheld these details from the state’s Democratic Attorney General, Richard Blumenthal.
Reporting by Joan Gralla; Additional reporting by Grant McCool and Ted Lorson in Hartford, Connecticut; Editing by Chizu Nomiyama