American International Group accused Bank of America of concealing a ten billion-dollar fraud case in a lawsuit alleging that the bank misrepresented the quality of more than $28 billion of mortgage-backed securities that it purchased from the Charlotte, North Carolina-based bank and its Countrywide and Merrill Lynch units.
Shareholders led by Camcorp Interests Ltd., a Houston-based investment firm, claimed that Executive Brian Moynihan and other officials knew in February 2011, six months before AIG sued, of the insurer’s claims and should have revealed them at the time. However, In a decision made public on Monday, U.S. District Judge John Koeltl in Manhattan said the second-largest U.S. bank and four officers, including Chief Executive Brian Moynihan, had not been required to disclose in advance the purported imminence or size of AIG’s lawsuit. The decision explained that details about the lawsuit were not materially different from what the bank had previously disclosed about its mortgage exposures.
Bank of America shares fell 20.3 percent on the day the lawsuit was filed. After the dismissal, Bank of America spokesman Lawrence Grayson said “We
are pleased with court’s decision.”
Photo courtesy of: mybanktracker.com