“It ain’t no fun if the homies can’t have none.” – Snoop Dogg.
The New York Times reported on Monday that AIG has sued Bank of America over hundreds of mortgage-backed securities, adding to the surge of investors seeking compensation for the troubled mortgages that led to the financial crisis. The suit seeks to recover more than $10 billion in losses on $28 billion of investments, in possibly the largest mortgage-security-related action filed by a single investor. It claims that Bank of America and its Merrill Lynch and Countrywide Financial units misrepresented the quality of the mortgages placed in securities and sold to investors, according to three people with knowledge of the complaint.
AIG, still largely taxpayer-owned as a result of its 2008 government bailout, is among a growing group of investors pursuing private lawsuits because they believe banks misled them into buying risky securities during the housing boom. At least 90 suits related to mortgage bonds have been filed, demanding at least $197 billion, according to legal consulting firm McCarthy Lawyer Links. AIG is preparing similar suits against other large financial institutions including Goldman Sachs (GS), JP Morgan Chase (JPM) and Deutsche Bank (DB), said the people with knowledge of the complaint, as part of a litigation strategy aimed at recovering some of the billions in losses the insurer sustained during the financial crisis.
Bank of America (BAC : NYSE : US$6.51), Net Change: -1.66, % Change: -20.32%, Volume: 670,003,567
American Intl. Group (AIG : NYSE : US$22.58), Net Change: -2.52, % Change: -10.04%, Volume: 19,805,730