Looks like the London branch is mostly responsible for the mismanagement, and Hank Greenberg explains in detail what happened that led to this disaster.

Here’s the thing…if most of these bonuses are going to Londoners who we can’t afford to lose because they’re the only people who can wind down all of these accounts, then we’re pretty much stuck and we should simply hope that they’ll return the money. Because no special excise tax will be able to touch those employees.

A sad state of affairs, but this is what happens when markets are left to regulate themselves.

Business Charlie Rose Talks To Former AIG CEO