Joseph Cassano, who led the division of American International Group Inc. responsible for the mortgage trades that proved the insurer's downfall, on Wednesday staunchly defended his actions, maintaining he made "prudent" decisions and that American taxpayers would have been better off had he stayed on.

In one of the most defiant statements by any Wall Street executive in the thick of the financial crisis, Mr. Cassano told a Congressional panel that he didn't misjudge the risks of subprime mortgage deals his unit entered into...