Financial Firms, PwC Fight Claims Over Colonial Fraud

Law360, New York (August 2, 2011, 6:14 PM EDT) -- A bevy of Wall Street firms that sold Colonial BancGroup Inc. securities and its former auditor PricewaterhouseCoopers LLP tried to snuff a putative class action in Alabama on Monday alleging they had a role in a massive fraud that toppled Colonial.

Underwriter defendants including Banc of America Securities LLC, Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc. moved to dismiss claims they misled Colonial investors about the quality of Colonial Bank's mortgage portfolio and business practices.

"The first amended complaint should be dismissed because it fails to allege material misstatements, proves that loss causation is absent, and ignores the...

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