I think you kind of missed most of the last half of the article. The overbearing asshole is not presented as the villian. AIG FP is not presented as "turning a blind eye", in fact they are described as halting much of their sub-prime involvement, if a little late; the article suggestts that if they had unwound the positions they did take before they realized the mortgage bundles were 95% sub-prime instead of 10% as they had been previously, AIG FP might have survived and the big banks would have had bigger loses.