Bank of America can't seem to catch a break, as more critics emerge over its controversial $8.5 billion settlement with aggrieved MBS holders. The latest company to join the chorus of criticism is AIG.

It will certainly not join the group that has settled with AIG and will instead oppose it for reasons that have become familiar. In fact, it will formally oppose it. It says that the bank relied on an overly conflicted trustee (BNY Mellon) to negotiate the settlement and that the value of the settlement was way too low. To pile on a bit, AIG will also file its own lawsuit against Bank of America, asking for more than $10 billion on the $28 billion worth of MBS it is holding. It basically believes that the bank, specifically its Countrywide unit and its Merrill Lynch unit, were not forthcoming about the mortgage risks when they sold the securities. According to the New York Times, AIG will file similar suits against other banks, including Goldman Sachs and JP Morgan Chase.

What has prompted this belated action? It may be that the insurance giant was waiting for government enforcement action, planning to piggyback and charges. But the likelihood of federal charges--criminal or civil--has dissipated. That realization might have prompted AIG to act. The bottom line for Bank of America and others is that yet another big settlement, which we expect at some point, will have to be reserved against.

For Bank of America especially, this is additional cause for uncertainty. That can be easily seen from the stock price movement. It has declined 50 percent so far this year, down to penny stock levels.

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