New York Fed Protects Bank of America Corp (BAC) From Big, Bad American International Group, Inc. (AIG)

But there was another element, as well. A ruckus ensued when it was discovered that the bank knew the lawsuit was coming, but never mentioned it in Securities and Exchange Commission filings or investor reports. This apparent lack of transparency seemed to upset investors concerned about these kinds of lawsuits, and it’s not hard to understand why: How can investors know the extent of the risk if the bank doesn’t divulge that information?

Here, again, there seems to be some skullduggery, just as B of A has begun to repair its reputation. Will this issue put the big guy’s stock back in the doghouse, as investors wonder what else they haven’t been told?

It remains to be seen whether or not the FRBNY actually had the authority to wave its magic wand in this manner. If it sticks, it could be good news for JPMorgan and Goldman, as well as B of A. If not, it could be better news for AIG.

The article New York Fed Protects Bank of America From Big, Bad AIG originally appeared on Fool.com and is written by Amanda Alix.

Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends American International Group (NYSE:AIG) and Goldman Sachs. The Motley Fool owns shares of American International Group, Bank of America, and JPMorgan Chase. and has the following options: Long Jan 2014 $25 Calls on American International Group.

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