American International Group Inc. (AIG) may succeed in returning its lawsuit against Bank of America Corp. over mortgage securities to a New York state court.
A federal appeals court in Manhattan today ruled that the Edge Act, a 1919 law that regulates international banking, doesn’t give the federal court jurisdiction over AIG’s suit. New York-based AIG sued Bank of America in state court in 2011 over losses it claimed on mortgage bond investments.
Bank of America, based in Charlotte, North Carolina, had the case moved to federal court, and U.S. District Judge Barbara Jones denied AIG’s request to return it to state court. The U.S. Circuit Court of Appeals in Manhattan today vacated Jones’s ruling and returned the case to the federal district court for further action.
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