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BAC Under Extended Investigation by Hagens Berman

""Bank of America Corp."":https://www.bankofamerica.com/ will continue to be under investigation, following a recent filing that alleges the big bank failed to properly inform investors as to risk factors associated with a pending lawsuit from ""American International Group"":http://www.aigcorporate.com/index.html. ""Hagens Berman"":http://www.hbsslaw.com/home/ announced that it will advance its look into BAC's investor dealings surrounding the bank's legal issues with AIG.


The original lawsuit that led to the current filing began in January, when AIG initiated a suit against the financial institution on claims that data analysis on $28 billion in mortgage-backed securities sold to AIG by BAC, Merrill Lynch & Co., and Countrywide Financial revealed misrepresentation of the risk included in the securities. Accordingly, AIG filed a $10 billion suit against BAC in August after heavy negotiations.

BAC shares dropped significantly in the wake of the AIG filing, and it's estimated that the full damages equate to around 20 percent per share. The new investigation by Hagens Berman is focused around BAC's lack of disclosure to investors, who were not informed of the risks inherent in the case of a major suit from AIG.

Reed R. Kathrein, a partner at Hagens Berman, elaborated on the basis of the BAC suit, saying, ""It appears clear that Bank of America knew for quite a while that negotiations with AIG were at an impasse. 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.""

Hagens Berman must meet a November 22 deadline to move the court for lead plaintiff. Recent developments on Capitol Hill could work to the advantage of Hagens Berman and related investors in BAC, since the ""Securities and Exchange Commission"":http://www.sec.gov/ has finalized its rules on whistleblower provisions contained in the Dodd-Frank Act as part of the implementation process.

The regulations protect whistleblowers from employer retaliation and also allow the SEC to give a financial reward to the individuals providing information that leads to successful enforcement. The SEC can now supplement whistleblowers with as much as 30 percent of the recovered amount.

About Author: Abby Gregory


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