The US Federal Reserve and the Treasury Department announced today that they will provide $40 billion of new financial support to insurance company, American International Group (AIG), which will increase total financial assistance to the company to approximately $150 billion. Specifically, the government plans to exercise its authority under the Emergency Economic Stabilization Act to purchase troubled assets by purchasing $40 billion in AIG preferred stock in an effort to restructure federal assistance to the company.
The $40 billion will be part of the $700 billion financial rescue plan, and will give the government partial ownership of AIG in return. AIG also must comply with executive compensation and corporate governance requirements of the Emergency Economic Stabilization Act.
Source: http://news.findlaw.com/ap/f/1310/11-10-2008/20081110032005_3.html
http://www.ustreas.gov/press/releases/hp1261.htm
