AIG Sues Bank of America in Attempt to Recover Billions

Financial sell-off follows Fed's move, sends markets plummeting

(NEWSER) - News of the Bear Stearns bailout triggered a sell-off today as investors were reminded that the true depth and breadth of current credit problems remains uncertain, the Wall Street Journal reports. Bear Stearns stock closed at 30, down a breathtaking 47.4% on the day. The Dow fell 194.65 to 11,951.09, the Nasdaq 51.12 to 2,212.49, and the S&P 500 27.34 to 1,288.14. More»

Matt Taibbi: It's 'ripping off virtually everyone'

(NEWSER) - Matt Taibbi gives Bank of America the " vampires squid " treatment today, savaging "the ultimate Too Big to Fail bank" as "a hypergluttonous ward of the state whose limitless criminal conspiracies we'll all be paying for until the end of time," in a lengthy Rolling Stone piece. "These guys are some of the very biggest assholes on Earth," systematically ripping off virtually everyone they do business with, Taibbi writes, "and on top of all that, they completely suck at banking." Among the many outrages he details:

• Bank of America, and subsidiaries Countrywide and Merrill Lynch, "pioneered ways to sell their toxic pools of mortgages to suckers."
• They conspired with other banks to rig municipal construction bids, "a mobster's crime, for which the accused used to do serious time," back when it was committed by "Eye-talians in gold chains instead of Ivy Leaguers in ties and Chanel glasses."
• The bank has been charged with scams specifically targeting the disabled, minorities, and the poor. "Seriously, who hasn't this bank conspired to defraud? Puppies? One-eyed Sri Lankans?"
• They often simply never pay required local fees—one Texas county alone estimates the bank owes it more than $100 million. "Think of that next time your county leaves a road unpaved."

They say takeover violated investors' fifth amendment rights

(NEWSER) - Former AIG CEO Hank Greenberg is suing the US government for $25 million for having the effrontery to bail out the dying insurer. Greenberg was ousted in 2005 after allegedly cooking AIG’s books to inflate its value, but still had a keen interest in the company during the bailout, because his firm, Starr International Co., was its largest shareholder. Now Greenberg’s saying that the bailout of the firm violated shareholders’ constitutional rights, the Wall Street Journal reports. More»

But it's not clear if they legally had to

(NEWSER) - Bank of America knew that AIG was about to try to sue its pants off as far back as January, but it never told investors on any of its conference calls or in any of its regulatory filings, sources tell Reuters . Public companies are supposed to disclose legal threats to their stock prices, and when the $10 billion AIG suit was announced earlier this month, it sent the bank’s stock plummeting 20%. More»

With another $8.5B to come

(NEWSER) - Bank of America has, as expected , reached an agreement for an $8.5 billion settlement with a group of disgruntled investors who lost truckloads of money buying mortgage-backed securities from Countrywide Financial, the bank announced today. It’s the largest payoff yet from a financial services firm, the Wall Street Journal reports, and it may embolden other financial crisis victims to file suits of their own. More»