AIG files fraud lawsuit against Bank of America
The once number one insurance company in the US, AIG, has filed a lawsuit against Bank of America and other financial institutions on allegations of fraudulent activities that led to it losing more than $10 billion.
Insurance corporation American International Group, Inc. (AIG) has filed a lawsuit on Monday against Bank of America Corp, further adding to the problems of the largest bank in the United States.
According to the formal complaint which has been filed in the New York Supreme Court in Manhattan, AIG is accused Bank of America along with Contrywide and Merrill Lynch of a “massive fraud” by misrepresenting the quality of mortgages placed in their securities which were sold to investors. The fraudulent acts, it stated, account for more than $10 billion worth of losses AIG experienced which resulted to its near collapse, forcing them to be bailed out through the aid of the government and taxpayers.
With the filing of the lawsuit, AIG has now become the latest in the growing number of investors who have filed similar complaints and lawsuits against major banks in the United States in the hopes to force them to become accountable and responsible for losses on troubled mortgages which have been pointed to be one of the major factors that brought about the global financial crisis back in 2008.
Bank of America rejects the allegations made by AIG, pointing to the losses acquired by the insurance company as a result of “its own excesses and errors.”
“AIG recklessly chased high yields and profits throughout the mortgage and structured finance markets,” Bank of America spokesman, Lawrence Di Rita, told reporters. “It is the very definition of an informed, seasoned investor, with losses solely attributable to its own excesses and errors. We reject its assertions and allegations.”
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Posted by Vince Huizenga
on Aug 8 2011. Filed under Featured, Finance.
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