AIG (AIG) Jumps Higher After Fairholme's Berkowitz Discloses Significant Stake

Despite details of Senator Dodd's financial reform bill, which includes a bankruptcy option, shares of AIG (NYSE: AIG) are moving higher mid-day after Fairholme Capital Bruce Berkowitz said he initiated a significant stake in the bail-out insurer.

Berkowitz owns more than 13 million of AIG's common shares more than 20% of some tranches of the firm's convertible debt, as well as other AIG bonds, according to a report from Morninstar.com.

Berkowitz said the company is cleansed and it is now clear enough to see how taxpayers get paid back by AIG. Berkowitz also said a potential rights offering will help the company move forward.

Shares of AIG are up 3.8 percent to $35.52 in late-afternoon trading.

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