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| Version 1 | Version 2 |
|---|---|
| Auditor warning hits AIG shares | Auditor warning hits AIG shares |
| (19 minutes later) | |
| Shares in the world's largest insurer, American International Group (AIG), have fallen by more than 10% after its auditors voiced concerns. | Shares in the world's largest insurer, American International Group (AIG), have fallen by more than 10% after its auditors voiced concerns. |
| There was a "material weakness" in how AIG valued defaults on credit, the auditors PricewaterhouseCoopers said. | There was a "material weakness" in how AIG valued defaults on credit, the auditors PricewaterhouseCoopers said. |
| AIG, the shirt sponsor of football team Manchester United, has previously said that it did not face major exposure to problems in the US housing market. | AIG, the shirt sponsor of football team Manchester United, has previously said that it did not face major exposure to problems in the US housing market. |
| However, analysts said the auditors' comments put a question mark over this. | However, analysts said the auditors' comments put a question mark over this. |
| AIG has divisions which insure and invest in sub-prime loans, which are made to people with poor or non-existent credit histories. | AIG has divisions which insure and invest in sub-prime loans, which are made to people with poor or non-existent credit histories. |
| In recent months, sub-prime loans have seen a surge in defaults, a factor that contributed to the recent and sudden freezing of world credit markets. | In recent months, sub-prime loans have seen a surge in defaults, a factor that contributed to the recent and sudden freezing of world credit markets. |
| AIG said it was "still accumulating market data in order to update its valuation" of the sub-prime portfolio. | AIG said it was "still accumulating market data in order to update its valuation" of the sub-prime portfolio. |
| However traders feared that the firm might have more mortgage debt to write off. | |
| By early afternoon trading in New York, AIG shares were $5.55, 11% lower at $45.13. | By early afternoon trading in New York, AIG shares were $5.55, 11% lower at $45.13. |