In a matter of minutes this morning, Bank of America (BAC -1.07%) both rose and fell sharply, leaving investors to wonder what the heck was going on. Sitting at a 0.74% gain just before 10:30 a.m. EDT, the bank is back in positive territory. One of the biggest news stories for the bank this morning revolves around its ongoing legal troubles -- let's take a look at all the latest developments from the week -- newest to oldest.

Update 1
News this morning says that the New York Attorney General's office may have to drop its suit against the bank for its acquisition of Merrill Lynch. The 2010 suit claims that during the acquisition process, B of A mislead investors by not disclosing the extend of losses suffered by Merrill. But once the bank settled a $2.43 billion class action suit with investors, approved by a federal judge in early April, the NYAG lost its ability to make claims on investors' behalf. Once shareholders got remedies from one avenue, they can't get a second helping elsewhere. While the AG office hasn't made any announcements about withdrawing the case, this is a big win for the bank, which can take another suit off its legal docket.

Update 2
A federal judge ruled that the U.S. can pursue civil penalties against Bank of America in relation to its sale of mortgages to Fannie Mae and Freddie Mac that resulted in $1 billion in losses for the federally insured institutions. Though the judge dismissed claims under the False Claims Act, which seeks penalties for those that target the government in fraud, he did allow the claims under the Financial Institutions Reform, Recovery, and Enforcement Act, which allows the government to pursue civil damages from those that "commit a fraud affecting a federally insured financial institution." The case questions a program started by Countrywide, which B of A acquired in 2008. Though this is one more item on the legal pad for the bank, there is a question as to how well the FIRREA law will hold up in the case, since it doesn't have much of a track record in court.

Update 3
Earlier in the week, AIG (AIG -0.45%) was cleared to move ahead with its $7 billion suit against Bank of America. The case had been delayed as the parties argued over whether the insurer still retained the rights to sue B of A over mortgage-backed securities sold by both Countrywide and Merrill Lynch, since the securities had been handed over to the Federal Reserve Bank of New York in a bailout. The latest ruling went in favor of AIG, stating that the insurer didn't lose all of its rights because of the bailout and subsequent transfer of the securities.

Update 4
Of course the legal news with the most impact for Bank of America this week was its settlement with MBIA (MBI -3.80%), announced on Monday. Though the bank will be shelling out $1.7 billion in cash to the insurer's mortgage insurance arm, providing a $500 million line of credit, and buying up to a 5% stake in the MBIA holding company, this is a big win for B of A. Taking this case off of its long list of legal battles was a must, and the case sets a precedent for how other cases (including the AIG one mentioned above) may go in the future.

Sum it all up
The bank still has a number of legal issues to resolve, and many investors may be concerned that it will never end. But the bank is making progress with settlements that can help clear off the docket and help it move forward. Since the only new development today was a good one, it's important to remember that the bank may fall sharply on any given day for no reason. Be careful not to follow the share price movements too closely each day, or else you may find yourself doubting your investment. The bank has made a lot of progress, and for the long-term investor, it's moving in the right direction.