U.S. Considering Conservatorship for AIG, Report Says

By: • Tue, Sep 16 2008, 5:19 PM

The U.S. government is considering conservatorship over AIG, much like the Fannie and Freddie take over last week, according to two sources who briefed Bloomberg on today's discussions.

"This would mean another shareholder wipeout," said David Ader, U.S. government bond strategist with RBS Greenwich Capital.

CNBC later reported the Fed doesn't have legal authority to take conservatorship.

AIG shares fell 48% after the closing bell, on top of the 21% fall beforehand.