U.S. investigators are probing the former head of American International Group Inc's Financial Products unit, Joseph Cassano, and other executives for securities fraud, a law enforcement source familiar with the case said on Friday.

The source said that a grand jury may be impaneled this month in New York to consider potential charges that executives failed to disclose the value of toxic assets to the insurance company's outside accountants and shareholders.

The investigation is really who knew what and when about these assets, said the source, who asked not to be identified because the probe was ongoing.

A spokesman for the office of the U.S. Attorney in Brooklyn, New York, which is conducting the probe, declined to comment.

(Reporting by Grant McCool; Editing by Toni Reinhold)

New York Aig