Turns out the folks in charge of winding down American International Group Inc are smart after all. They might be too clever by half, though.

It's now public knowledge that AIG was arguing to the government's special master for executive pay last summer and fall that its common shares were worthless, and that its top managers therefore should receive their salaries all in cash rather than partly in stock. This revelation came thanks to Steven Brill's article in last weekend's New York Times magazine. Brill's primary source was impeccable: Kenneth Feinberg, the pay czar himself.

There's an important angle to this story not addressed in Brill's article. If top AIG executives believed the common stock was worthless, why did the company keep issuing financial statements that still showed billions of dollars of common shareholder equity? If the Securities and Exchange Commission isn't digging into this question already, it should be. So should AIG's outside auditor, PricewaterhouseCoopers LLP.