A US court ruled Monday that the government takeover of insurer AIG during the financial crisis was illegal, but refused to grant billions of dollars in damages to AIG founder Hank Greenberg.

"While the taking of 79.9 percent equity ownership and the running of AIG's business were not permitted under the Federal Reserve Act, the government did not cause any economic loss to AIG's shareholders" because, without the bailout, shareholders would have had nothing, the court said.