Story updated with a Moore Captial statement

NEW YORK (

TheStreet

) --

American International Group

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filed a lawsuit Thursday against ICP Securities and Moore Capital Management, alleging it was a victim of fraud when it came to the sale of toxic collateralized debt obligations.

"ICP's fraud harmed AIG and the American taxpayer and we are fighting back," said AIG spokesperson Mark Herr.

The suit against ICP alleges that it breached its fiduciary duty by executing $1.5 billion in unauthorized, above-market CDO purchases when it managed two programs for AIG Financial Products.

AIG Financial Products was at the center of the insurers' 2008 liquidity crisis that eventually pushed it towards near collapse. The unit is currently being wound down.

The lawsuit also claims that ICP, and its client Moore Capital Management, benefited from the transactions while AIG Financial Products suffered at least $350 million in damages.

According to the suit, ICP started making purchases of residential backed mortgage securities for AIG in 2007 before the housing market deteriorated. The purchases were made without AIG's approval, the suit alleges, adding that ICP then traded on the securities without AIG's approval.

Moore Capital stated that they were not found cupable in a similar investigation by the SEC that took place last year. SEC documents confirm that Moore Capital lost over $200 million on the transactions associated with ICP managed CDOs.

Calls to ICP were not immediately returned.

This is one of several lawsuits that AIG will be pursuing against Wall Street firms for damages it suffered from mortgage bonds.

The New York Times

reports that other banks that underwrote RMBS bonds for AIG such as

Goldman Sachs

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,

Morgan Stanley

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and

JPMorgan Chase

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, which acquired Bear Stearns may also face lawsuits.

--Written by Maria Woehr in New York.

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