Hagens Berman Announces Securities Investigation Of Bank Of America


Hagens Berman Announces Securities Investigation Of Bank Of America

Hagens Berman Announces Securities Investigation Of Bank Of America

Hagens Berman Sobol Shapiro LLP today announced that it is investigating concerns by hedge funds and institutional investors who believe Bank of America Corp. (NYSE: BAC) may have failed to disclose to investors the risk associated with a $10 billion lawsuit threat from American International Group (“AIG”) (NYSE: AIG).

According to reports, AIG invested in billions of dollars of mortgage-backed securities sold by Bank of America prior to the housing collapse. 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.

Hagens Berman is investigating whether Bank of America failed to disclose fully the risks of its dispute with AIG. According to media reports, the bank did not mention the threat of the lawsuit in its quarterly regulatory filing, which was issued four days before AIG’s lawsuit was filed.

“We believe that Bank of America knew, or should have known, that its dispute with AIG represented a significant risk for investors,” said Partner Reed R. Kathrein, who is leading the firm’s investigation from its San Francisco office. “If the company did indeed fail to disclose such a risk, it could represent a major breach of the securities laws.”

On August 8, 2011, after several months of negotiations, AIG filed its lawsuit. Bank of America shares fell sharply, losing 20 percent of their value.

Institutional investors and others who purchased Bank of America common stock between May 5, 2011 and August 8, 2011, and who have losses exceeding $1,000,000 as a result of BAC’s stock drop on August 8, 2011, are encouraged to contact the firm. Reed R. Kathrein can be reached at (206) 623-7292 or via email at CCME@hbsslaw.com. Investors can also learn more about this investigation at www.hbsslaw.com/BACsecurities.

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