BofA Argues AIG Can’t Sue Over Devalued Mortgage Bonds

Bank of America Corp. lawyers asked a federal judge to dismiss American International Group Inc.’s fraud claims over devalued Countrywide Financial mortgage-backed securities it had to sell as part of the government bailout.

U.S. District Judge Mariana Pfaelzer, at a hearing today in Los Angeles, didn’t rule on Bank of America’s request. The bank, which acquired Countrywide in 2008, argued that AIG transferred the right to sue over the securities when it sold them as part of a $21 billion transaction to an entity created by the Federal Reserve Bank of New York.