Using the word `Redacted’ about 840 times in a single 16-page document is begging for trouble.
The above is an excerpt from the Shortfall Agreement between AIG and Maiden Lane III, filed to the SEC in March 2009. It’s also similar to the Shortfall Agreement referred to in those emails, released last week, showing the New York Federal Reserve urging the bailed-out insurer to limit disclosure on the 100-cents-on-the-dollar payments it made to its counterparties (banks) on their, now infamous, CDOs.
The below, for instance, was from AIG deputy general counsel Kathleen Shannon:
In order to make only the disclosures that the Fed wants us to make, which we understand to be to not include the CUSIPS or Tranche names and give the amounts by counterparty on total rather than a transaction by transaction basis, we need to have a reasonable basis for believing and arguing to the SEC that the information we are seeking to protect is not already publicly available.
The Fed’s argument to the SEC must have been pretty convincing, since the end result was a document along the lines of the one you see above. The Schedule A to the March 2009 agreement was granted confidential status by the financial watchdog, which means the redacted info won’t be made public until sometime in 2018.
Related links:
Redacted AIG filing might have spotted worst deals – Reuters
AIG bail-outs attract further scrutiny – FT