AIG Reportedly to Sue Bank of America Over Mortgage Bonds

NEW YORK ( TheStreet) -- Insurer AIG ( AIG) plans to sue Bank of America ( BAC) for losses on more than hundreds of mortgage-backed securities, The New York Times reported.

The suit seeks to recover more than $10 billion in losses on $28 billion of investments, in possibly the largest mortgage-security-related action filed by a single investor, according to the Times.

AIG claims that Bank of America and its Merrill Lynch and Countrywide Financial units misrepresented the quality of the mortgages placed in securities and sold to investors, according to three people with knowledge of the complaint, the newspaper said.

-- Written by Joseph Woelfel

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