Fortune 500 rank: 245Loss:
No surprise here: The New York-based insurance company that spawned an out-of-control London derivatives dealership is now a $170 billion (and counting) headache for the American
taxpayer. The bulk of the losses came from the hundreds of billions of dollars worth of contracts created by AIG Financial Products to pay off holders of mortgage-backed securities if
the home loans that backed them defaulted.
As housing prices collapsed last year, the epicenter of the crisis quickly moved to the London offices of the previously little-known AIGFP. When AIG said in September it couldn't
make good on the huge sums it owed AIGFP counterparties like Goldman Sachs, the U.S. Treasury Department took an 80% stake in the company rather than watch those contracts unravel
NEXT: Fannie Mae