Excerpts from the depositions - Wall Street Journal

Case 2:11-cv-10549-MRP-MAN Document 254-1 Filed 03/28/13 Page 8 of 35 Page ID
#:16597
Swift testified that had AIG been transferring fraud claims to ML II, he would have wanted to
present that to the state insurance regulators.
• “Q. What was your role in making presentations to insurance regulators about the ML II
transaction? A. Yeah, I was the lead spokesperson for AIG’s Life and P[&]C
companies on the securities lending matter. Q. And what type of oversight, what type
of information did the regulators want to hear from you as the principal presenter?
[Objection ] A. They want―they wanted, and expected, transparency on anything
significant.” 99:13–100:2.
• “Q. [Discussing presentation to insurance regulators] Is there any reference to the
assignment of fraud claims to ML II in Exhibit 77? A. No. Q. In making your
presentations to insurance regulators, how did you describe the assets that AIG was
selling to ML II? A. Throughout the various pages in here, you can see that we
were―we―we were referring to the assets, . . . either as the RMBS assets or the
non-RMBS assets. . . . [T]he RMBS assets, as it related to the ML II transaction,
were described as residential mortgage-backed securities. Q. And did you say
anything to the regulators that might suggest fraud claims were being assigned? A. No.”
101:3–102:2.
• “Q. If you had believed that fraud claims were assigned to ML II, what, if anything,
would you have done differently in your presentations to insurance regulators? A. At
minimum, I probably would have had a bullet point just talking through it as―as a
deal point. Q. Why? A. I think, again, if―if you really understand the nature of the
securities lending pool, these were the assets and obligations of the underlying
insurance company’s balance sheets. And if AIG gave up that right and obligation,
the insurance commissioners will want to know about a future monetizable asset, or
future recovery that was also, you know, given up. So, anyway, it would have just
been a significant part of the overall transaction we would have talked about.”
102:3–23.
Swift testified that ML II was intended to stabilize AIG while ensuring the FRBNY would be
repaid.
• “Q. In structuring this Maiden Lane II transaction, what was your understanding of the
objective as to AIG going forward? [Objection] A. I mean, the objective of AIG was
to stabilize, continue to stabilize, you know, the organization with a solution to a
program that―that created large credit losses and some inherent volatility in its
equity position. Q. So, to put it in more simple terms: Was the transaction part of a
solution to help AIG recover from the financial crisis? A. I believe so.” 120:14–121:4.
• “A. The Fed made it very clear that it was a lender. It was intent on having its loan
repaid, and it used BlackRock and us to give them comfort that, under various
economic conditions and scenarios, their loan would be repaid. They made it very
clear that they had never had a loss on a loan they made, and they never intend to
have a loss on a loan that they made.” 82:7–16.
• “A. That was the Fed’s primary objective, was to always be viewed as the lender,
and they never were going to be allowed/permitted to incur a loss. Q. Did you
understand why this transaction resulted in a very low likelihood of failing to repay the
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