After some controversy erupted about a pricey spa getaway for top-producing insurance agents and their spouses, government regulators are reportedly keeping a close eye on the spending habits of American International Group (AIG: sentiment, chart, options) . The insurance company was rescued from the brink of bankruptcy last month by an $85-billion federal loan, but that number leaped to $122.8 billion earlier this week. It's no surprise, then, that many taxpayers and legislators have expressed outrage over the costly retreat sponsored by AIG just a week after the bailout.

To combat any more questionable accounting moves, The Wall Street Journal reports that a team from the New York Fed, along with some outside experts, are working to analyze AIG's fiscal flows. Additionally, Fed employees are keeping in close contact with AIG chief Edward Liddy (who argued that the retreat was "mischaracterized" in the press); the Journal reports that Liddy talks with regulators "many times a day."

Meanwhile, option traders snapped up calls on the spendthrift insurer on Thursday. On the International Securities Exchange, traders yesterday bought to open 6,385 calls and 1,938 puts on AIG. Similarly, traders on the Chicago Board Options Exchange bought to open 5,622 calls and 2,062 puts. As a result, the stock's Schaeffer's put/call open interest ratio fell overnight to a fresh annual low of 0.58, as calls nearly double puts among near-term options.

At last check, AIG is down nearly 14% at $2.06.