Business Ethics Now 3rd Edition by Andrew Ghillyer

Exercise 42

Your employer, American International Group (AIG), received almost $180 billion in federal bailout dollars in the belief that the collapse of AIG would have a catastrophic effect on the U.S. financial markets-the company was "too big to fail." Poor management choices had led the company to depend heavily on revenue from insuring investors against defaults on financial bonds backed by risky subprime mortgages (up to trillions of dollars of policy coverage). With the collapse of the housing market, investors filed claims on those insurance policies with AIG, and the company quickly discovered that it had insufficient financial resources to meet all those claims.

Is it possible to resolve this issue to the satisfaction of both the taxpayers who bailed out AIG and the senior executives Why or why not
Sources: Gretchen Morgenson, "Behind Insurer's Crisis, Blind Eye to a Web of Risk," The New York Times , September 28, 2008; Sharona Coutts, "AIG Bonus Scandal," ProPublica , March 18, 2009; and Op-Ed contributor, "Dear AIG: I Quit!" The New York Times , March 25, 2009.