AIG loses bid to move $10 billion fraud case versus BofA

A federal judge rejected American International Group Inc's request to move its $10 billion mortgage fraud lawsuit against Bank of America Corp back to a New York state court, where AIG believed the case belonged. US District Judge Barbara Jones in Manhattan accepted Bank of America's argument that some home loans underlying the 349 residential mortgage-backed securities that AIG said it bought allowed a federal court to assert jurisdiction.
The bank had cited a 1919 federal law governing international banking. AIG had argued that its fraud and other claims under state law predominated, and that the complexity of the case warranted having a New York state court apply New York law. In its August 8 lawsuit, AIG had accused Bank of America of engineering a "massive" fraud. It said the bank and its Countrywide and Merrill Lynch units misrepresented the quality of more than $28 billion of securities it bought, and lied to credit rating agencies about the underlying loans.