With the Justice Department filing few criminal charges related to the financial crisis, AIG is taking action of its own: The mostly taxpayer-owned firm is preparing to sue Bank of America for allegedly misleading it about the quality of Bank of America's mortgage-backed securities—an accusation that gets to the root of the financial crisis. AIG wants to recoup more than $10 billion in losses in what might be the biggest mortgage securities lawsuit by "a single investor" in history, the New York Times reports.
AIG, which also plans action against JP Morgan Chase, Goldman Sachs, and Deutsche Bank, joins dozens of other investors in some 90 such lawsuits seeking a total of $197 billion. The Justice Department is closing many of its investigations without launching criminal charges; private firms are shouldering the burden of taking the financial firms to task, the Times notes. “To the extent there are places where shareholders and borrowers can pursue claims, they are really serving the function of the government. They are our private attorneys general,” says an expert. Click through for more on AIG’s lawsuit. (Read more AIG stories.)