It's only been a week since Bank of America (NYSE:BAC) and its compatriots got a big bump from positive Fed stress test results. It had been on an upward climb following its combined  $10.5 billion share repurchase plans until yesterday, when the bank suddenly began falling. Currently hovering around breakeven, Bank of America is struggling to maintain its gains from earlier in the week.

Though largely assuaged, investor concerns over the Cyprus economy may still be a factor in the financial sector's moves -- especially next week if the country's government cannot find a resolution to their problems before Monday. Today's moves, however, show a wavering of investor confidence as the bank faces yet another test in court.

Bank of America, along with JPMorgan (NYSE:JPM) and Citigroup (NYSE:C), has been named in a suit filed by Freddie Mac alleging that the banks were involved in the rigging of the widely used LIBOR rate. The case states that the banks colluded in order to artificially suppress the interest rate from Aug. 2007 to May 2010 in order to not only inflate their profits but to hide their growing financial problems. It is estimated that both Freddie Mac and Fannie Mae have lost as much as $3 billion to $1 trillion in losses from mortgage securities and other investments tied to LIBOR. 

Though JPMorgan and Citigroup are both up today in trading, all three banks have dropped since the suit was announced on Wednesday and subsequently filed on Thursday:

Bank % Decline
Bank of America 1.64%
Citigroup 1.87%
JPMorgan

1.57%

Source: Yahoo! Finance

This latest lawsuit for Bank of America brings back the dark cloud that's been hovering over the company since the financial crisis. Many analysts believed that the worst of its legal woes were behind it, but this new round of court activity may put that theory in the trash. Still, there has been plenty of positive lip service for the bank in recent days. Meredith Whitney was back in the news as she predicted that B of A could rise to $20. Others suspect that the stock will move to the high teens in the next 12 months, bringing the bank's price closer to its tangible book value.

As most here at the Fool would tell you, basing any investment decision on one day's price movements would be foolish (note the lowercase "f"), but being educated on the factors that can move your stock's price will help to make you a better investor, capable of weathering the price fluctuations of any particular day. And today's moves are a big indication of a serious threat to Bank of America's recent highs. Keep an ear out for further developments on the Freddie case, as this will have a definite impact on Bank of America's price.

Fool contributor Jessica Alling has no position in any stocks mentioned -- you can contact her here. The Motley Fool owns shares of Bank of America, Citigroup, and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.