• On 11/29/07, PwC told AIG management: “the fact that FP and AGF in late 2005 were reducing their exposure to subprime while AIG Investment and UGC were increasing theirs – seemed to show a lack of cross AIG evaluation of risk exposure to a sector” and combined with other items “raised control concerns around risk management which could be a material weakness.”²²
• On 11/19/07, Paul Narayanan emailed Kevin McGinn and stated that in the subprime crisis, “some parts of our organization were cognizant of the emerging risks and were able to avoid them whereas some others were not made aware of it and so did [not (sic)] avoid the risk.” ²³
• McGinn disagreed, and said that “all units were apprised regularly of our concerns about the housing market;” that “some listened and responded; others simply chose not to listen and then, to add insult to injury, [did] not spot the manifest signs” and that this was akin to “nero playing the fiddle while Rome burned.”²⁴
• McGinn told FCIC staff that the Securities Lending business was one of the divisions at AIG that “chose not to listen” and “played the fiddle while Rome burned.” ²⁵

²² PWC notes of 11/29/07 Meeting, PWC-FCIC 000381-383.

²³ 11/19-20/07 email (AIG-SEC9422058-60) at 059.

²⁴ 11/19-20/07 email (AIG-SEC9422058-60) at 059.

²⁵ Interview of Kevin McGinn.

2010-0630-AIG-Risk-Management.pdf - 29p