AIG sues bank for $10B in mortgage mess
The Pine Street headquarters of American International Group in lower Manhattan. AIG, which was bailed out by American taxpayers in 2008, is suing the Bank of America for $10 billion claiming it was victimized by mortgage-backed securities that were sold before the housing bubble burst. Credit: Getty Images, 2009
Insurer AIG wants more than $10 billion from Bank of America, saying the bank cheated it by selling it overvalued mortgage-backed securities.
American International Group Inc. filed suit Monday in New York State's Supreme Court.
Bank of America Corp. denies the allegations, saying AIG "recklessly" chased investments with high returns, and was big and sophisticated enough to know the risks.
Banks have been hit by a series of suits over misrepresentations related to the securities. In June, Bank of America agreed to pay $8.5 billion to a group of investors for selling them poor-quality mortgage securities.
AIG nearly failed in October 2008, but was buoyed up with taxpayer loans of more than $122 billion.
