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Investors Hit Countrywide With Subprime Fraud Suit

Law360 (January 25, 2011, 1:40 PM EST) -- A group of institutional investors has accused Bank of America Corp. unit Countrywide Financial Corp. of perpetrating a fraud that misled investors into buying hundreds of millions of dollars in risky mortgage-backed securities.

The investors filed a lawsuit Monday in the New York County Supreme Court, asserting they were deceived into believing the securities were backed by mortgages issued pursuant to specific underwriting guidelines when they were in fact backed by much riskier loans.

The plaintiffs, including Dexia Holdings Inc., TIAA-CREF Life Insurance Co. and New...
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