Joe Cassano, the man who brought insurance giant AIG - and the world economy - to their knees, has dodged the proverbial bullet: he will not be indicted for his actions in the collapse of AIG's Financial Products unit, which he ran until his resignation in 2008. Federal prosecutors searched diligently for evidence of wrong doing. What they found, however, was evidence of cluelessness. Joe Cassano was no crook: he was just a manager in way over his head. He apparently believed that underwriting credit default swaps was relatively risk free. Oh, well, it seemed like a good idea at the time.
If no good deed goes unpunished, incompetence on a cosmic level is not without its rewards: Cassano made about $280 million in eight years of running the FP unit, in addition to receiving a performance bonus of $35 million in his final year with the company. That last payment truly boggles the mind. Cassano was paid for high volume sales of a product that destroyed his company.
Joe Warin and Jim Walden, Cassano's (presumably high paid) attorneys were delighted with the outcome of the investigation:
Although a two-year, intense investigation is tough for anyone, the results are wholly appropriate in light of our client's factual innocence. This result was the product of two things: an innocent client and fair prosecutors and agents. The system worked.
It would be more accurate to say that the system was worked. As was evident in a prior blog, Cassano was not a nice guy who happened to make a mistake. He was a thug dressed up in a fancy suit. Perhaps on some level it's reassuring that his actions were not criminal, that he acted in the expectation that his company would make money. Cassano certainly made an obscene amount of money, but AIG rank and file, the shareholders and the tax payers have to foot the bill for the mistakes of one greedy goon.
