The New York Times reports that the suit claims 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 seeks to recover more than $10 billion in losses on $28 billion of investments.
Mark Herr, a spokesman for AIG, confirmed to the New York Times the company's plans to file a lawsuit on Monday.
“Bank of America’s fraud caused billions of dollars in damage to AIG and we are bringing this suit today to protect AIG and the taxpayers’ stake in it,” Herr said in a statement. “This is not the first lawsuit that AIG has filed against counterparties that have sought to profit at our expense, and we anticipate that it will not be the last.”
According to the New York Times, people with knowledge of the complaint say AIG is expected to bring similar suits against other large financial institutions including Goldman Sachs, JPMorgan Chase and Deutsche Bank, all as part of a litigation strategy aimed at recovering some of the billions in losses the insurer sustained during the financial crisis.
