BofA sat on knowledge of AIG lawsuit for 7 months

Beleaguered bank chose not to disclose pending litigation in its quarterly regulatory filing

The seemingly endless saga of companies suing Bank of America Corp. (BofA) over losses related to mortgage-backed securities took another turn yesterday as reports surfaced that the bank knew as early as January that American International Group Inc. (AIG) intended to sue the company for $10 billion—a full seven months before the suit was filed.

Earlier this month, AIG finally filed the lawsuit against BofA, alleging the bank and its subsidiaries, Countrywide and Merrill Lynch, misrepresented the quality of mortgages it sold to investors. As a result, AIG said it lost $28 billion in investments.

Join the Conversation

Advertisement. Closing in 15 seconds.