Skip to main content

Newsroom

August 8, 2011

Best News In A Long Time

Breaking news:  the media is reporting that AIG is going to sue Bank of America for more than $10 billion in damages over the alleged massive fraud by it and its subsidiaries Merrill Lynch and Countrywide in writing, creating and/or packaging mortgages and mortgage derivatives.  AIG is reportedly also going to object to other BofA settlements with other investors. The Wall Street Journal article is here and the New York Times article is here

As noted by the WSJ, “The size of AIG’s losses makes the suit one of the largest of its kind brought by an investor since the housing bubble popped.”

This is the best news in a long time because at long last there is a lawsuit that is directly targeted at some of the most egregious conduct at the core of the financial crisis.  Moreover, with more than $10 billion in losses, it is being brought by a plaintiff who has every incentive to pursue the suit vigorously.  Given the failure of the few prior investigations to really get to the bottom of the crisis, this suit at least raises the possibility that some of the key facts may finally be discovered and, hopefully, work their way into the public record.

Given that AIG only exists because it was bailed out by taxpayers and is still owned by them, one would hope that whatever influence the US has over AIG would demand that it go after BofA as aggressively as possible and ensure that the facts be thoroughly discovered and made publicly available.  Put another way, the US should object to any quick settlement, should insist on extensive discovery, and should make sure that any settlement only occure after all the facts and circumstances are sufficiently known to make an informed decision. 

I’m not really very optimistic because the US (or should I say the US Treasury Department and Fed which have been in the lead on BofA matters) has been overly concerned with the health and viabilty of BofA.  It’s going to be one interesting lawsuit with the US having substantial interests on both sides, but it’s still good news. 

 
Blog
Share

MEDIA REQUESTS

For media inquiries, please contact us at
[email protected] or 202-618-6433.

Contact Us

For media inquiries, please contact [email protected] or 202-618-6433.

To sign up for our email newsletter, please visit this page.

Name(Required)
This field is for validation purposes and should be left unchanged.

Sign Up — Stay Informed With Our Monthly Newsletter

"* (Required)" indicates required fields

This field is for validation purposes and should be left unchanged.

For media inquiries,

please contact [email protected] or 202-618-6433.

Donate

Help us fight for the public interest in our financial markets, protecting Main Street from Wall Street and avoiding another costly financial collapse and economic crisis, by making a donation today.

Donate Today