AIG sues Bank of America for $10 billion

AIG, still largely owned by taxpayers after $182.3 billion of government bailouts, is the latest of a growing number of investors filing lawsuits to hold banks responsible for losses on soured mortgages that contributed to the financial crisis.

The AIG complaint accuses Bank of America and its Countrywide and Merrill Lynch units of misrepresenting the quality of mortgages placed in securities and sold to investors. AIG said it suffered its losses on $28 billion of investments. “Defendants were engaged in a massive scheme to manipulate and deceive investors, like AIG, who had no alternative but to rely on the lies and omissions made,” said the complaint, being filed in the Manhattan-based New York State Supreme Court in Manhattan.

Bank of America bought Countrywide for $2.5 billion in July 2008 and acquired Merrill six months later.

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