This reads like a who's who of a Wall Street high-stakes Poker Tournament:

BoA private email archive thrown open in $11bn AIG lawsuit
Leo King, Computerworld UK -- 08/10/2011

After trawling through hoards of emails sent by Countrywide executives, AIG’s lawsuit details some damaging comments made ahead of the subprime mortgage lender’s collapse, allegedly showing Countrywide executives were aware that the company was providing loans to consumers who could not repay them and misrepresenting the risk level to the companies they were selling the loans onto.

Countrywide chief executive and co-founder Angelo Mozilo wrote in emails to senior colleagues before the firm’s collapse that he was concerned the company’s subprime loan products weretoxic”, “poison,” and “the most dangerous ... in existence”, and that by selling them the company was facing “catastrophe”. Nevertheless, Countrywide sold billions of dollars worth of the products.

Bank of America rejects the allegations and has said that AIG was a “seasoned” investor that was able to make its own sensible judgement.

"Buyer Beware" AIG, you're betting/leveraging/trading in the Big Leagues now.

Yet even the Big Leaguers, have to "play by the rules", do they not?  One would assume.

[... Pg 2 ...]

A series of other emails reveal that Countrywide was approving loans as long as it could package and sell them in the market, rather than assessing closely the likelihood of them being repaid, AIG alleges.

David Sambol, Countrywide home loans’ president and chief operating officer, is effectively accused in the lawsuit of encouraging risky practices. He wrote in an email in 2005 that the company’s “pricing philosophy” for selling mortgage-backed products ought to be made clear so that “we should be willing to price virtually any loan that we reasonably believe we can sell/securitize without losing money, even if other lenders can’t or won’t do the deal”.

AIG alleges that Bank of America, in itself and through subsidiaries Countrywide and Merrill Lynch, sold mortgage backed securities in methods “marred by fraud, misrepresentations and omissions”. It claims that not only were the mortgages sold to people who could not repay them, but they were packaged into financial market products branded as low risk. AIG says it bought $28 billion of the products based on the risk profile advertised.

After the suit was filed on Monday in the New York Supreme Court, in Manhattan, Bank of America -- which denies the charges -- lost nearly a quarter of its stock market value. Last year, Goldman Sachs paid regulator the Securities and Exchange Commission $550 million in order to settle allegations that it fraudulently marketed mortgage-backed securities, though it did not admit wrongdoing.

BofA said in a statement that AIG chose to take the risks, and knew what it was doing. [...]

Funny, I thought the SEC was suppose to be the Referee, the Bouncer, the minder of the 24/7 Casino Cameras -- making sure everything is "on the up and up" -- relatively speaking that is?

I wonder what Goldman got in exchange for that 550M 'Honorary Tribute' to those SEC wise-guys, anyways?

SEC facing damaging data destruction allegations
Leo King, Computerworld UK -- 08/25/2011

Senator Chuck Grassley, the senior Republican on the Senate Judiciary committee, said the data that the SEC is alleged to have destroyed -- between 1993 and 2010 -- also concerned investigations into alleged insider trading at Deutsche Bank, SAC Capital and collapsed bank Lehman Brothers; as well as into corporate practices during Goldman Sachs' trading of complex products with insurer AIG.

That's Odd.  Oops!  Somebody down at the SEC "erased the tapes" ...  Sorry people.  Move along now.

Well at least the BofA still has their records on file ... What's that?  BoA and AIG have had their Investigative Wardrobe Malfunctions too, down at the SEC?   Uh-oh.

That's Odd, indeed.  I wonder who's getting fired?   (besides the whistle-blower.)

National Archives: SEC wrongfully destroyed records
by Sarah N. Lynch, Reuters -- Aug 18, 2011

The findings by the National Archives come after Darcy Flynn, a 13-year-veteran of the SEC, decided to blow the whistle after learning the SEC had destroyed over 9,000 "matters under inquiry," or MUIs. MUIs are preliminary documents the SEC compiles when it receives evidence of possible securities violations.

In a letter Flynn sent to Senator Charles Grassley, he claimed the SEC destroyed files on important, high-profile cases, including Bernard Madoff, Goldman Sachs Group Inc (GS.N), trading in American International Group Inc (AIG.N) credit-default swaps, alleged frauds at Wells Fargo & Co (WFC.N) and Bank of America Corp (BAC.N) and insider-trading probes at Deutsche Bank AG (DBKGn.DE), Lehman Brothers and hedge fund SAC Capital.

"The SEC did not have the authority to dispose of them per the Federal Records Act," the National Archives said in a statement to the press.

Authority -- Shamority!  They don't need No Badges -- they got Shredders!

Imagine that, I wonder if AIG's choice of Venue had anything to due with the SEC's House Cleaning efforts?  No telling, what a hard-charging NY AG might uncover, given enough facts and the Prosecutorial Opportunity.  So many Rocks to turn over -- so little time.

Now however, Not so many BoA Rocks left to turn over, either.  Sorry AIG.  "Buyer Beware." AIG You Understand.  All Wall Street Sales are Final!  The House reserves the Right to Refuse service to anyone ....

Remember AIG, if someone sells you "a box of rocks", it's up to you to verify those rocks -- are what the Seller says they are, Diamonds in the rough -- or simply, just The Rough.

Don't expect the local "Rock Inspectors" to lend you a hand.  They're too busy you see, making sure that there are No More Rocks left to uncover.  There's a LOT of Angry Buyers out there, you understand ...

"Toxic" doesn't explain the half of it.  They might have to go out, and buy NEW industrial strength shredders ... before they're done.

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