Rotsztain, Diego A 01/13/2009 07°50:04 PM Shannon, Kathleen@Ny Subject Spec al SEC procedures voicemail. What | have been AIG should b al procedures to rection with tne s W agreement. | understand 1 ve delivering the etter via rier to a specific person (not the examines) who willbe responsible for ensuring that the le {get into the wrong hands and is afforded the appropriate attention. You should, hay realy from th tf they have not co row early in the day, Iwai reach out to the FRBNY. ng a call from the SE mission of the CTR andRe: ML Il - SEC disclosure issue 000000000003FFFF0074001372080000 Thornas Baxter 01/13/2008 08:45 PM HaeRan Kim, James Hennessy, Joyce Hansen, “Michael Nelson', Stephanie Heller Show Deals Tom, Update on this issue: after discussing intemally and with Board staff, we reached out to SEC staff on their request that AIG either publicly disclose a schedule to the Maiden Lane Ill documents showing the positions that ML III had purchased, or submit a request for that document's confidential treatment. We highlighted the substantial harm that the public disclosure of the information could cause to MAL Ill, and the Federal Reserve's significant interest in the information. While SEC staff appeared receptive to these concems, they would not make a determination on confidentiality until they see AIG's request, which wil be filed with the SEC tomorrow, We have reviewed and commented heavily on this request, Further, SEC staff advise that their regulations require that the schedule to the material agreement be produced to them for their review as part of this process. ‘This would mean that it would become an SEC record, subject to FOIA, and we understand that a FOIA request has already been made of them by BusinessWeek. We asked whether an altemative process might work -- ike SEC staff reviewing the material at the Federal Reserve ~ but they said it would not. ‘They did, however, offer to implement special security procedures for handling of the document -- providing for hand delivery to the head of the relevant office, limiting the staff who could review it to two; keeping it in a locked safe during the review process; and, assuming a favorable determination, providing for its storage in a special area at the SEC where national security related files are kept. While we would obviously prefer that the schedule not be produced at al, this special procedure seems to indicate that they understand the extreme sensitivity of the information. Let me know if you have any questions, sim James P Bergin/NY/FRS 1/08/2008 08:35 PM to ‘Thomas BaxterINYIFRS Joyoe Hansen/NY/FRS@FRS, HaeRan KimINY/FRS@FRS, "Michael Nelson’ ‘michael nelson@ny fr.org>, James Hennessy/NY/FRS@FRS. Subject ML IIl- SEC disolosure issue HiTom, | wanted to make you aware of an issue we are wrestling with with MIL Il. As you know, AIG publicly fled two documents in connection with the Maiden Lane Ill closing, the Credit Agreement and the Shortfall Agreement, the latter of which has, as a schedule, a list of the CDOs purchased by ML Ill, including CUSIPs, counterparties, and amounts. AIG did not file the schedule with the disclosure, and SEC staff has objected (apparently with the prompting of AIG investors). DPW feels that while i's customary not to furnish such detailed information on trading positions, SEC staff are probably reacting to the great scrutiny of AIG. SEC staff is requesting that AIG either disclose the schedule or file a request for confidentiality. AIG is preparing a confidentiality request, based on competitive harm, and ‘we are reviewing and commenting on drafts of that. Because of the likelihood of competitive harm fo ML Ill (and thus to AIG) ifits inventory of positions were made public, it seems the confidentiality request has a good chance of success. However, pursuant to the SEC's rules for confidentiality requests, filers must file a paper copy of the requested confidential portion with the SEC, and must also consent to its further disclosure to other agencies and Congress. This requirement is giving us some pause, since we haven't otherwise disclosed this information CONFIDENTIAL FRBNY-TOWNS-R3-004119to Congress. Joyce, others, and | are having a call with Rich Ashton tomorrow to consider our options. Let me know if you have any questions, sin CONFIDENTIAL FRBNY -TOWNS-R3-004120SEC call James P Helen Mucciolo, Alejandro LaTorre, Joyce Hansen 0171272009 10:36 AM Michael Nelson, Stephanie Heller ‘This message has been forwarded. The SEC call went pretty well. Staff were receptive to the call and my presentation about the potential harm to ML IIL and the FRS, but essentially noncommittal. Alison Thro of Board Legal (chief FOIA person) was on the line, and described the positions that we've taken with respect to FOIA requests and litigation in the past, and said that she ‘would lke to work together with SEC staff on this. SEC staff sounded very interested in collaborating with Alison, which is a good sign that they appreciate that this information should be kept confidential. | made the request to have the schedule reviewed by SEC slaff by an alternative procedure rather than becoming an SEC record subject to their FOIA process -- whether by FRS staff coming to them or SEC staff coming to us, They said that they have recelved similar requests in at least one instance before ~ relating to national security ~ but that their impression was that it hhad been denied on account of the confidence that they have in their handling procedures. In response to my arguments about govemmental interest here, they agreed to consider this internally and get back to me today. CONFIDENTIAL FRBNY-TOWNS-R3-009189