Did Bank of America

Reuters reports that Bank of America did not properly disclose impending lawsuit by AIG.
http://www.reuters.com/article/2011/08/30/us-bankofamerica-lawsuits-idUSTRE77T47620110830

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About Mark P. Holtzman

Chair of Accounting Department at Seton Hall University. PhD from The University of Texas at Austin. Worked at Deloitte's New York Office. BSBA from Hofstra University.

3 comments

  1. Bank of America definately knew the AIG suit was going to be filed and should have disclosed it, even if the potential damages were unestimatable at the time. The AIG suit was going to be material, after all the MBS's they bought from Bank of America, anyone could figure out that AIG was going to sue for a lot. Potential litigation against a company needs to be dislcosed if it is material and probable. The executives and legal team of Bank of America chose not to disclose the possibility of the suit to save the stock price, even though they knew it was probable and would be material.

  2. I agree with Reuters report that Bank of America did not properly disclose the impending lawsuit by AIG. It was obvious to anyone following this and extremely obvious to BoA that AIG was going to sue for a material amount and therefore they should have disclosed it to alert investors but chose not to as to not harm their image and current stock price.

  3. I agree with the Reuters article that Bank of America is at fault for not properly disclosing their impending lawsuit in their quarterly filings to SEC. This lawsuit could lead to a huge potential loss for BoA and investors had the right to know before the lawsuit was filed. Bank of America's credibility regarding disclosures has been questioned in the past with the 2009 lawsuit by Finger claiming under-disclosure of information. One would think they would learn from their mistakes…

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