The Resolution Law Group: AIG Settles Ex-Executive’s $274M Lawsuit Over Alleged Failure to Pay Him During 2008 Economic Crisis

American Insurance Group (AIG) and one of its ex-executives, Kevin Fitzpatrick, have reached a settlement deal over his $274 million lawsuit against the insurer. Fitzpatrick, the former president of the AIG Global Real Estate Investment Corp. unit, claims that his then-employer would not pay him during the 2008 economic crisis. The insurer’s refusal to pay occurred not long after the US government said yes to the first part of what would turn into a $182 billion bailout.

Fitzpatrick, who worked for AIG for 22 years, said that AIG breached agreements it had with him and entities under his control. He claims the agreements entitled him to a share of profits made on the insurer’s real estate investments but that on October 2008 AIG stopped paying him and others who were entitled to profit distributions. Fitzpatrick then quit.

Fitzpatrick sued in 2009, claiming that AIG owed him $274 million and that he wanted interest and punitive damages, which is right around the time that the insurer was trying to get past public disapproval over $165 million in bonuses that were paid to employees in the AIG Financial Products unit. That is the group that handled the complex financial instruments that led to its huge losses.

AIG denied wrongdoing and said that Fitzpatrick was paid what he was owed. The insurer contended that Fitzpatrick actually was fired and that he stole data that was confidential and belonged to the company.

In other AIG-related news, a district court judge just threw out a shareholder lawsuit accusing Bank of America (BAC) of not telling them that the insurer was planning to sue the bank with a $10 billion fraud lawsuit. AIG accused Bank of America of misrepresenting the quality of more than $28 million of MBSs that AIG bought from the latter and its Countrywide and Merrill Lynch (MER) units.

Also, there are reports that AIG might file mortgage-backed securities case against Morgan Stanley (MS) over $3.7 billion of MBS.

If you feel you are the victim of Securities Fraud, please do not hesitate to email or call the The Resolution Law Group (203) 542-7275 for a confidential, no obligation consultation.

The Resolution Law Group: Judge Dismisses Shareholder Lawsuit Suing Bank of America For Allegedly Concealing AIG Fraud Case

A judge has thrown out a securities lawsuit by shareholders accusing Bank of America Corp. (BAC) of concealing that insurer AIG (AIG) intended to file a $10 billion fraud case against it. U.S. District Judge John Koeltl in Manhattan said that BofA and four of its officers were not obligated to reveal in advance that the lawsuit was pending or that it was a large one.

AIG filed its securities fraud lawsuit against Bank of America in 2011. The insurer claimed that the bank misrepresented the quality of over $28 billion of mortgage-backed securities it purchased not just from the bank but also from its Merrill Lynch (MER) and Countrywide units. On the day that the complaint was filed, shares of Bank of America dropped 20.3% and Standard & Poor’s revoked the tripe-A credit rating it had issued.

The shareholder plaintiffs claim that the bank’s officers, including Chief Executive Brian Moynihan, knew about the MBS fraud case six months before the lawsuit was submitted and they should have given them advance warning.

Judge John Koeltl, however, said that the specifics about the securities case did not materially differ from what Bank of America already disclosed in its mortgage exposures. He also determined that the bank did not issue inaccurate or incomplete statements.

AIG’s mortgage-backed securities lawsuit is still pending.

Meantime, the media is reporting that the AIG may be getting ready to file another MBS fraud case, this one against Morgan Stanley (MS). The case would be over the $3.7 billion of mortgage securities that the bank sponsored and underwrote between 2005 to 2007 that AIG then bought. The insurer has submitted a regulatory filing about its plans to possibly file. AIG ended a “tolling agreement” with the firm that would have allowed them to resolve their disagreement outside a courtroom.

The Resolution Law Group’s mortgage-backed securities lawyers represent institutional and individual investors that have sustained financial losses because of securities fraud. Contact our MBS fraud law firm today.

Judge Dismisses Suit Against Bank of America For Not Disclosing AIG Claims, Insurance Journal, November 4, 2013

The Resolution Law Group: It has been a very good week for AIG in California litigation. AIG prevailed in the publicized Michael Jackson trial. Less publicized, but probably more valuable to AIG is the recent ruling by a Federal Judge in the central district of California.

It has been a very good week for AIG in California litigation. AIG prevailed in the publicized Michael Jackson trial. Less publicized, but probably more valuable to AIG is the recent ruling by a Federal Judge in the central district of California.

AIG previously sued Bank of America over fraudulent mortgage securities. Bank of America argued that AIG had no standing to sue because it had transferred that right when it sold the instruments to the federal Reserve Bank of New York in 2008.

Geoffrey Broderick, the senior partner of the Resolution Law Group, says “Judge Pfaelzer’s finding that AIG has standing to sue Bank of America may also be bad news for other banks that sold troubled mortgage securities to the insurer. AIG has not yet sued other institutions, but we know from public records that AIG suffered at least $11 Billion in losses involving other banks.”

Mr. Broderick adds that “The housing market will continue to suffer until it is fixed by the Courts or the Legislature. Somebody has to fix the problem. That is why The Resolution Law Group continues its fight for homeowners. Homeowners cannot expect the problem to fix itself.”

The Resolution Law Group continues to prosecute ground breaking litigation in Federal Court on behalf of homeowners suing lenders and servicers for, among other things, the illegal use of MERS, robo-signing, and intentionally ignoring underwriting standards and encouraging inflated appraisals.

The Resolution Law Group is currently enrolling clients into the pending lawsuit. For further information, visit its website at www.TheResolutionLawGroup.com

The Resolution Law Group: AIG Shuts Down Customers’ Bank Accounts in the Wake of Dodd-Frank Limits

American International Group (AIG) will give its banking unit back their money and close out their accounts. The move is because the Dodd-Frank Wall Street Reform and Consumer Protection Act has imposed limits on insurers that have units that take deposits.

In a letter to clients, the insurance giant said that retail deposit accounts would stop being serviced as of September 30 and AIG Bank will become a “trust-only organization.” Interest will be included in the fund returns.

AIG is streamlining its focus before rules limiting proprietary trading and investments by insurance companies in banking units in hedge funds or private equity go into effect. Already, Allstate Corp., Hartford Financial Services Group Inc., MetLife Inc. (MET) have stepped back from banking or sold deposits because of greater regulator oversight.

Because of AIG’s involvement in banking, the Office of Thrift Supervision was its main federal regulator before the economic crisis. In 2009, the OTS said that it “fell short” of that oversight and failed to identify the risk involved in the insurer’s credit-default swap portfolio. The US later spent $182.3 billion to bail out the insurer, which the latter repaid last year. AIG is now overseen by the Fed, and state watchdogs can regulate its insurance units.

In July, AIG received the designation of “systematically important,” which could subject it to stricter cap rules and additional oversight by the Fed. To receive this designation indicates that regulators believe the company could threaten the financial system if the insurer were to fail.

Our securities fraud law firm represents investors that sustained losses because financial representatives, investment advisers, broker-dealers and/or firm executives were negligent, careless, or committed financial fraud.  If you feel you are the victim of Securities Fraud, please do not hesitate to email or call the The Resolution Law Group (203) 542-7275 for a confidential, no obligation consultation.

The Resolution Law Group: AIG Sued by Nuveen Funds For Securities Fraud

25 Nuveen Investments Inc. funds have filed a securities fraud lawsuit against American International Group (AIG) accusing the company of federal securities laws and Illinois securities law violations, common law fraud, and unjust enrichment in the months before the 2008 US financial crisis. They want unspecified monetary damages. Also named as defendants are ex-CEO Martin J. Sullivan, ex-CFO Steven Besinger, and Joseph Casano, who was in charge of the AIG Financial Product unit.

Among the funds suing AIG are the Nuveen Large Cap Value Fund, the Nuveen Equity Premium Opportunity Fund, and the Dow 30 Enhanced Premium. The funds purchased AIG securities at prices that were purportedly inflated and dropped when the truth was revealed.

The plaintiffs claim that they lost tens of billions of dollars in part because of materially misleading and false statements that AIG and others allegedly made. They contend that when the housing market started to fail, AIG told analysts that the risks it faced were “modest and remote” and that they didn’t see any potential financial losses tied to the swaps business.

AIG began upping its writing of credit default swap contracts in 2005 and started focusing on US residential mortgage loans, including subprime loans. It was around this time that its AIG Financial Products unit ceased its insuring of certain credit default obligations due to what it cited as a drop in standards for subprime loan underwriting.

The Nuveen funds believe that AIG did not disclose that it was experiencing an internal control weakness tied to its valuing of the CDS portfolio and it wasn’t until February 2008 that AIG stated in a filing with the SEC that it did not properly estimate its swaps portfolio market losses. By September of that year, AIG required federal aid of $85 billion because it was verging on bankruptcy. That amount would later go up to $182.3 billion.

The securities fraud case was filed in court in Chicago. However, the plaintiffs they said they would qualify to be part of the lawsuit against AIG in federal court in Manhattan if the judge determines that the case can move forward as a class action securities case.

Also making similar fraud claims against AIG is the Regents of the University of California. The Regents claim that the company concealed its subprime mortgage exposure between 2006 and 2008 and inflated its stock price, which caused the university system to suffer losses when shares of AIG dropped.

Our securities fraud law firm represents institutional clients and high net worth individuals with claims against financial firms, investment banks, broker-dealers, investment advisers, brokers, and financial representatives. Over the years, The Resolution Law Group has helped thousands of investors recoup their losses.  Please do not hesitate to email or call the The Resolution Law Group (203) 542-7275 for a confidential, no obligation consultation.

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

The Resolution Law Group: AIG Drops RMBS Lawsuit Against New York Fed, Fights Bank of America’s $8.5B MBS Settlement

American International Group (AIG) and Maiden Lane II dismissing lawsuit against the Federal Reserve Bank of New York regarding the $182.3 billion financial bailout that the insurer received during the 2008 economic crisis. In dispute was whether AIG still had the right to pursue a lawsuit over residential mortgage-backed securities losses and if the company had moved $18 billion of litigation claims to Maiden Lane, which is a New York Fed-created entity.

An AIG spokesperson said that in the wake of a recent ruling by a district judge in California that the company did not assign $7.3 billion of the claims to Maiden Lane, both are dropping their action without prejudice. This means that AIG can now pursue Bank of America (BAC) for these claims, which is what the insurer wants to do.

Bank of America had said that AIG could not sue it over the allegedly fraudulent MBS because the latter transferred that right when the New York Fed bought the instruments in question 2008. However, according to Judge Mariana R. Pfaelzer, even if the New York Fed meant for Maiden Lane II to have these claims, that intention was not made clear.

On Tuesday, in New York State Supreme Court, the insurer argued that the proposed $8.5 billion settlement reached between the bank and investors in MBS from Countrywide Financial Corp. is not enough. The judge there is trying to determine whether to approve the settlement, reached with investors who claimed that the firm had misrepresented the mortgages backing the securities.

AIG is one of a number of entities that oppose the settlement. At the hearing, one of its lawyers questioned why the settlement was merely $8.5 billion when investors initially asked for $50 billion.

AIG also is arguing that there may be a conflict of interest with those that arrived at the proposed settlement amount. The insurer is questioning whether trustee Bank of New York Mellon (BK), which does a lot of its trustee business with Bank of America, did a good enough job of researching the risks involving successor liability and investigating the loan files. Bank of NY Mellon also is the trustee for 530 trusts that are holding the securities under dispute. Another investor supporting the current proposed settlement is BlackRock Inc, which also has a strategic relationship with the bank.

Meantime, the attorney who negotiated the $8.5 billion proposed settlement between BofA 22 institutional investors says that not only is this the biggest settlement in the history of private litigation, but also it is worth almost two times as much as Countrywide, which is valued at $4.8 billion.

If you suspect that you are the victim of securities fraud, do not hesitate to email or call please contact The Resolution Law Group at (203) 542-7275 for a confidential, no obligation consultation. Our securities fraud attorneys are here to help institutional investors recoup losses that are a result of a financial scam or negligence. Your consultation with us is free.

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud

The Resolution Law Group: $500M MBS Settlement Reached Between Countrywide and Investors

Class action securities plaintiffs, led by the Iowa Public Employees’ Retirement System, have settled their mortgage-backed securities lawsuit against Countrywide for $500 million. This is the largest federal class action MBS securities case in the US that has been resolved to date, even exceeding the $315 million settlement reached with Bank of America’s (BAC) Merrill Lynch (MER) last year.

Per the investors, Countryside, which was acquired by BofA, sold them billions of dollars in MBS certificates that were backed by defective loans. Toward the end of 2008, nearly all of the certificates were relegated to junk bond status.

The plaintiffs allege that offering documents for the mortgage-backed bonds failed to disclose that Countrywide was ignoring its own guidelines regarding home loan originating. In their consolidated class action securities case, investors sought over $351 billion of the Countrywide MBS that had been downgraded after the subprime collapse in 2007. (A district judge would go on to narrow the mortgage-backed securities lawsuit to $2.6 billion in bonds and Bank of America was dismissed as a defendant.)

According to Bank of America, this securities settlement resolves approximately 80% of the principal balance of RMBS that were issued by Countrywide and has not yet been paid. However, now there is news that American International Group can go ahead and file its RMBS lawsuit against Countywide. A judge said that the insurer could pursue claims accusing the latter of making false representations in offering documents that it had abided by underwriting guidelines. It was just earlier this week that Bank of America settled with bond insurance company MBIA Inc. over Countrywide for $1.6 billion.

The Resolution Law Group continues to prosecute ground breaking litigation in Federal Court on behalf of homeowners suing lenders and servicers for, among other things, mortgage backed securities, the illegal use of MERS, robo-signing, and intentionally ignoring underwriting standards and encouraging inflated appraisals.  The Resolution Law Group is currently enrolling clients into pending lawsuits.

For further information, prospective clients are invited to call the law firm or visit its website at www.TheResolutionLawGroup.com

Lender Litigation, Unlawful Foreclosure, Tarp Money, Mortgage Backed Securities, Derivitives Lawsuits, Insider Trading Lawsuit, SEC Settlements, Ponzi Scheme Lawsuits, Intentional Misrepresentation, Securitized Mortgage, Class Action Securities Lawsuit, Robo-Signing Lawsuit, Lost Equity Litigation, Mortgage Lender Fraud, FINRA Fraud Lawsuit, Suing Banks, Fraudulent Misrepresentation, Short Sale Fraud, Fraudulent Business Practices, Mortgage Litigation, Complex Tort Litigation, Injunctive Relief, MERS Fraud