THE VOID LEFT BY ELLIOT SPITZER

It is too bad that Mr. Spitzer abandoned his calling as a “big picture” prosecutor. His self destruction has left a great void in the field of innovative financial law enforcement. No one seems capable of putting the big picture together over at the AIG “Hole in the Wall”. AIG is either the biggest example of criminal negligence, outright securities fraud or both.

They made hideous bets on toxic asset backed subprime securities and credit default swaps. Perhaps stupidity is an excuse. But their management (Mr. Sullivan and company) lied publicly about the extent of the exposure. They still have not fessed up. How else can it be that we are now looking at bailing out the biggest loss quarter in corporate history. $60 billion seems like a lot of dough, except at AIG where they have everything under control.

Clinton got hung for perjury, Arthur Anderson lied about document shredding and paid for it, can’t AIG’s management or former management get hung for fraudulent disclosure?

Their securities lending strategy was another mega farce that defies belief. Moreover their follow up trade, investing short term proceeds in illiquid subprime securities was a toxic cocktail mixing rotten financial mushrooms with bad subprime acid.

AIG could claim the “financial tsunami defense.” These events were totally unprecedented. That strategy just does not fly when your ship is top heavy with so much toxic garbage that a mere summer squall would inevitably result in a capsize.

Why is it that Mr. Cuomo, who is busy barking about bailout bonuses (rightfully so) can’t get a handle on what happened at AIG? A creative prosecutorial mind would find an angle to hold some one accountable for the bailout black hole we keep hearing about every quarter.

This is the void left by Spitzer.