Lawsuits
Bank of America was sued for $10 billion by American International Group Inc. in August 2011. Another lawsuit filed September 2011 concerns a total of $57.5 billion in mortgage-backed securities Bank of America sold to Fannie Mae and Freddie Mac.
In September 2012, in a deal worth $2.4billion, BofA settled out of court in a class action lawsuit filed by BofA shareholders who felt they were misled about the purchase of Merrill Lynch.
On October 24, 2012 American federal prosecutors filed a $1billion civil lawsuit against BofA for mortgage fraud under the False Claims Act which provides for the possibility of triple the damages suffered, which may end up costing BofA over $3billion dollars. The government claims that Countrywide which was acquired BofA rubber-stamped mortgage loans to risky borrowers and forced taxpayers to guarantee billions of bad loans through Fannie Mae and Freddie Mac. The suit was filed by Preet Bharara, the United States attorney in Manhattan, the inspector general of FHFA and the special inspector for TARP . This lawsuit was filed against the bank itself and not against any of its executives.
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