JPMorgan Chase & Co. stopped advising American International Group Inc. on a global plan to sell more than a dozen units, because the job threatened to disqualify the banking company from doing business with potential buyers for years, three people with knowledge of the matter said.
JPMorgan Chase, the world's second-biggest merger adviser, is still working with AIG to sell at least three divisions and may seek its permission to work with buyers of other units, according to the people, who asked not to be identified, because the new arrangement has not been formalized.
AIG, which was rescued from collapse by $152.5 billion in government aid, is trying to sell up to $60 billion of assets.
The withdrawal of JPMorgan Chase highlights the thicket of conflicts Wall Street investment bankers face as they vie for roles in dismantling AIG, once the world's largest insurer. Its operations, which range from the jet-leasing business International Lease Finance Corp. to Japanese life insurance companies, span about 130 countries.
More than a dozen banking companies have lined up jobs advising AIG, potential bidders, or regulators.
JPMorgan Chase is "engaging in a little fee calculus," said William Cohan, a former investment banker there. "In this market, when no one else is lending, they can make a lot of money representing buyers and doing the financing."
Neither Brian Marchiony, a spokesman for JPMorgan Chase, nor Nicholas Ashooh, a spokesman for AIG, would discuss the matter.
Wrong-way bets in the credit default swap market drove AIG to the brink of bankruptcy Sept. 16, when it was rescued by the Federal Reserve Board.