US SUPREME COURT REJECTS GREENBERG SUIT OVER AIG BAILOUT

The US Supreme Court on Monday refused to review a challenge to the federal government’s 2008 bailout of AIG that had been brought by former AIG boss Maurice “Hank” Greenberg’s Starr International Co. Starr originally filed the suit in federal court in Manhattan in 2011, accusing the New York branch of the Federal Reserve of engaging in several transactions during the AIG bailout that breached its fiduciary duty to AIG shareholders. Starr, which at the time of the bailout was AIG largest shareholder, said the rescue of AIG was actually a backdoor bailout of Goldman Sachs and other Wall Street banks that were counterparties to AIG credit default swaps. The US district court ruled in favour of the New York Fed, as did the Second US Circuit Court of Appeal, which in January found that the Delaware fiduciary duty law cited by Starr did not apply to the Fed owing to the “uniquely federal interests at stake in stabilizing the national economy. The Supreme Court let the lower court rulings stand without comment.