Morgan Stanley Gets AIG Role
Morgan Stanley has been named as a primary financial adviser for any public offerings or divestitures for units of American International Group Inc., according to documents released by the New York Federal Reserve.</br></br>The New York Fed, which has played a leading role in the government bailout of AIG, said it paid Morgan Stanley an initial $4 million advisory fee along with $2.5 million each quarter since October. The investment bank also can bill expenses related to work done on behalf of the insurer up to $5 million without needing approval from the New York Fed.</br></br>The documents also showed that the Fed agreed to pay Ernst & Young LLP as much as $60 million for its advice relating to AIG. The accounting firm in September had a $40 million limit before it was amended in May, according to the documents.</br></br>Ernst & Young is charging $775 an hour for work done by partners or executive directors. The New York Fed will also reimburse Ernst & Young for expenses related to AIG work, not to exceed 10% of the hourly fees charged.</br></br>AIG, Ernst & Young and Morgan Stanley declined to comment.