From my perspective, the AIG fracas is strictly a governance issue. If the current shareholders have a legal position it is not against the government but first and foremost against the board of directors of AIG who signed off on the arrangement offered by the government. They might also seek redress from the board that succeeded the board at the time of the agreement -- the board that has guided the company back to profitability and financial stability. Why, they might ask, did you not try to re-negotiate the terms of the original agreement?

No question, the board of AIG during the period 2006-2008 was asleep at the switch. Most of us knew that the level of credit default swaps and the counter claims circling the globe at the time were estimated in the trillions of dollars. I came to the number $16 trillion in discussing with my classes and clients as being as reliable as any because nobody really knew. AIG continued to insure the positions and backup positions of many, if not most, of the players. Where was the board of directors, the risk management system, and the recognition of fiduciary responsibility?

There’s no sense in analyzing water long over the dam. The Bush Administration had no choice but to include AIG in its rescue package. Whether or not the deal that they made with AIG at the time, was as claimed, unfair and unreasonable, should be for the courts to decide in a case by shareholders against the board of directors at the time the deal was signed, not the government which made a reasonable offer to save AIG (and the global economic structure).

The fact that the current board even considered taking up the claim of unreasonableness back in 2008 is ludicrous. The company is well-run and has survived, reclaimed its top position globally, made lots of money, paid off the government and is paying PR firms lots of money to run a ‘Thank you, America’ campaign.

To vote to join the shareholder action would make we want to wish my parents were still alive so I could sue them over the menial allowance I received as a teenager. It really is that silly.

James is executive director of the Center for Global Governance, Reporting and Regulation at Pace University in New York City. He is also program director of Pace University’s Certified Compliance and Regulatory Professional certificate program.