American International Group Inc. may file a lawsuit againstMorgan Stanley related to $3.7 billion worth of mortgage securitiesthat the investment bank sponsored or underwrote from 2005 to 2007,and which AIG purchased, according to a regulatory filing onMonday.
|AIG has terminated a “tolling agreement” with Morgan Stanley,which allowed the companies to try to settle their dispute out ofcourt. The termination will be effective Thursday, according toMorgan Stanley's 10-Q filing with theU.S. Securities and ExchangeCommission.
|A Morgan Stanley spokesman declined to comment. A spokesman forAIG did not immediately respond to requests for comment.
|In August 2011, the insurer filed a $10 billion lawsuit againstBank of America Corp, accusing the bank of “massive” mortgagefraud. Bank of America has denied any wrongdoing. The lawsuit isworking its way through multiple jurisdictions.
|Although Morgan Stanley set aside less money last quarter forlegal expenses, so far this yet it has accrued an additional $549million for litigation costs, up 44 percent from the $381 millionit accrued in the first nine months of 2012.
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