The Serious Fraud Office (SFO) announced today that it has launched a "preliminary inquiry" into the UK operations of AIG Financial Products, which is owned by America's American International Group (AIG).

AIG is one of around six preliminary investigations into suspected City scandals being conducted by the SFO. Others include a $50 billion fraud allegedly perpetrated by Bernard Madoff, the US fund manager.

The SFO said today that it is cooperating with US authorities "who are already conducting separate, independent investigations involving conduct at AIG Financial Products Corporation." It is also working with Britain's Financial Services Authority.

The SFO said today its inquiry does not concern any of AIG's insurance businesses here or abroad.

It is believed the regulator has begun to use its statutory powers to seize documents and interview people in relation to the AIG investigation.

AIG was recently rescued by the US Government for a second time, which has pumped more than $150 billion into propping up the struggling business and owns a stake in the group.

Last month, AIG announced that it would not renew its sponsorship deal with Manchester United Football Club when the contract runs out in 2010.

Commenting on the investigation, Richard Alderman, director of the SFO, said today: “It is right for us to look into the UK operations of AIG Financial Products Corp, to determine if there has been criminal conduct.

"We will use our full range of powers to seek information and to speak to those with an inside knowledge of the company’s operations.”

The SFO said that both AIG Financial Products Corp. and AIG are cooperating and have offered their assistance to the SFO as it conducts its inquiry.

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