<div><p>NEW YORK (Reuters) - U.S. regulators are investigating whether the mortgage insurance market was improperly distressed in 2008 because of payment demands that Goldman Sachs Group Inc <GS.N> and other banks made on American International Group Inc <AIG.N>, The New York Times reported on Sunday.</p><p>On a conference call between Goldman and AIG executives early that year, the Wall Street bank wanted the insurer to pay more than the $2 billion it already paid to cover losses Goldman said it might suffer on complex securities, the paper said, citing AIG documents and an audio recording of the call.</p><p>AIG executives wanted some of the $2 billion back, saying Goldman had inflated the potential losses, the paper said, adding the call ended with nothing settled.</p><p>Then the world's biggest insurer, AIG insured Goldman's securities. It was bailed out with a $182.3 billion government aid package when the mortgage market-inspired financial crisis struck later in 2008.</p><p>Now, the Securities and Exchange Commission is examining whether the demands by banks were improper, the paper reported, citing people briefed on the matter.</p><p>"This is the New York Times' third attempt to develop a conspiracy theory about Goldman Sachs and AIG," Goldman spokesman Lucas van Praag said in an email. "The theories are disgracefully contradictory and the 'facts' don't stand up to serious scrutiny."</p><p>The Federal Reserve's bailout of the insurer remains controversial because it funneled nearly $70 billion to 16 big U.S. and European banks that had bought credit default swaps from AIG.</p><p>Goldman, Societe Generale <SOGN.PA> and other banks had bought those insurance-like derivatives to guard against defaults on hundreds of securities backed by subprime mortgages.</p><p>A portion of the $11 billion in taxpayer money that went to SocGen, the French bank, was later transferred to Goldman under a deal struck by the two banks, the Times also reported, citing two people with knowledge of the positions.</p><p>A spokeswoman for AIG said it had no comment. A New York-based SocGen spokesman was not immediately available.</p><p>(Reporting by Jonathan Spicer, Editing by Maureen Bavdek)</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=68644500&bid=informcom" /></div><div id="copyright"><div>

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