Tuesday, August 9, 2011
8/9/2011 - AIG Sues Bank Of America For $10 Billion Over 'Massive Mortgage Fraud'
Source: Daily Bail
It's getting ugly. BofA will need at least $100 billion to avoid bankruptcy. Ken Lewis' retirement SIV (BAC stock) is trading sharply lower (currently down 17%) dragging down all financials.
(Reuters) - The insurer American International Group Inc (AIG:nyse) is suing Bank of America Corp (BAC:nyse) to recover more than $10 billion of losses from a "massive fraud" on mortgage debt, deepening the morass of litigation faced by the largest U.S. bank.
AIG, still largely owned by taxpayers after $182.3 billion of government bailouts, is the latest of a growing number of investors filing lawsuits seeking to hold banks responsible for losses on troubled mortgages that contributed to the financial crisis.
The AIG complaint, being filed in the New York State Supreme Court in Manhattan, accuses Bank of America and its Countrywide and Merrill Lynch units of misrepresenting the quality of mortgages placed in securities and sold to investors.
Reuters obtained a copy of the complaint. AIG is preparing similar lawsuits against other large banks.