Hagens Berman today announced that it is continuing to advance its investigation of Bank of America (NYSE: BAC) (“BAC”) after a lawsuit was filed alleging that the banking giant failed to disclose the risk associated with a $10 billion lawsuit threat from American International Group (“AIG”) (NYSE: AIG) to investors.
Institutional investors and others who purchased Bank of America common stock between February 25, 2011, and August 5, 2011 (the “Class Period”), are encouraged to contact the firm. The deadline to move the court for lead plaintiff is November 22, 2011.
According to the lawsuit, BAC, Merrill Lynch & Co. and Countrywide Financial sold $28 billion in mortgage-backed securities to AIG. In January 2011, after analyzing data from hundreds of thousands of loans, AIG reportedly informed the bank that it felt the risk of the securities had been misrepresented and was prepared to sue the banking giant for more than $10 billion.
Following months of reported negotiations, AIG filed suit against BAC on August 8, 2011. BAC shares fell sharply, losing 20 percent of their value. Hagens Berman’s investigation centers around claims that BAC failed to fully disclose the risks of a pending legal battle with AIG.
“It appears clear that Bank of America knew for quite a while that negotiations with AIG were at an impasse,” said Reed R. Kathrein, Hagens Berman partner. “A potential $10 billion issue is material to most companies. How BofA failed to mention it in quarterly and earnings reports is baffling to investors.”
Reed R. Kathrein, who is leading the firm’s investigation, can be reached at (206) 623-7292 or via email at BACSecurities@hbsslaw.com. Investors can also learn more about this investigation at www.hbsslaw.com/BACsecurities.
Individuals with direct non-public information that may help advance the investigation are also encouraged to contact the firm.
The SEC recently finalized new rules as part of its implementation of the whistleblower provisions in the Dodd-Frank Wall Street Reform Bill. The new rules protect whistleblowers from employer retaliation and allow the SEC to reward those who provide information leading to a successful enforcement with up to 30 percent of the recovery.
About Hagens Berman
Seattle-based Hagens Berman Sobol Shapiro LLP is an investor-rights class-action law firm with offices in ten cities. The National Law Journal has rated Hagens Berman as one of the top ten plaintiffs’ firms in the country four out of the last five years. More information about the firm is available at www.hbsslaw.com, and the firm’s securities law blog is at www.meaningfuldisclosure.com.
Media Contact: Mark Firmani, Firmani + Associates Inc., 206.443.9357 or firstname.lastname@example.org