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Treasury Sells Shares of AIG

Treasury Sells Shares of AIG

The Treasury Department has sold a portion of its ownership of American International Group for $18 billion netting the taxpayers a profit of $12.4 billion.

The U.S. government invested approximately $185 billion into AIG in 2008 when the firm was close to bankruptcy. The bailout was a controversial decision that many in the finance community say will have consequences. Economist and financial experts are now calling for the breakup of large financial institutions to prevent another bailout from occurring in the future.

"Taking action to stabilize AIG during the financial crisis was something the government should never have had to do, but we had no better option at the time to protect the American economy from the damage that would have been caused by the company's collapse," said Treasury Secretary Timothy F. Geithner when he announced the sale.

With the sale of a portion of its shares, the federal government will no longer be the majority shareholder of AIG. The treasury had come to own 92 percent of the company and has been selling portions of its stocks at various points in the last few years. The company will still owe about $5.3 billion following the sale, The Los Angeles Times reported.