Trading in exotic derivatives that nearly brought down American International Group may not have been limited to the insurer's overseas units. Previously, regulators said the risky trading had been done by a London-based unit, but now evidence is emerging that one of its biggest U.S.-based units also took part in the trading. "You have this blind spot on insurance companies," Christopher Whalen, a co-founder of Institutional Risk Analytics, a research firm, said of current efforts to increase regulation of exotic derivatives trading.

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