Case in point, AIG: bailout $150 Billion, fined $725 Million (0.5%)
Here’s the part that really confounds me:
A first payment of $175m is scheduled within days of the court’s approval, however, while AIG is expected to raise the further $550m th[r]ough the issuing of new shares.
So the company was found guilty and fined. The first payment will be 1/1000th of the cost we bought 80% of the company for a year ago, and presumably will be paid out of that money. The rest they will pay by devaluing the bailout shares – by getting more suckers to invest in them…
Wouldn’t that make the fact they’re going to pay their fine by issuing new shares equivalent to a thief telling the judge he’ll pay bail “right after I nip next door to the jewelry store…”?
Is it not a bit like Bernie Madoff offering to compensate his victims with shares in a new enterprise he’s setting up … ?
Caveat: I’m asking questions, I am genuinely confused by this issue and poorly informed.