Prudential Sues BofA, Merrill Over $119M In ‘Garbage’ MBS

Law360, New York (July 07, 2014, 5:53 PM ET) — Prudential Investment Portfolios 2 accused Bank of America NA, Merrill Lynch & Co. Inc. and others of knowingly selling $119 million worth of “garbage” mortgage-backed securities in a suit removed to New Jersey federal court on Monday.

The 229-page complaint says the Bank of America entities, Merrill Lynch entities and First Franklin Financial Corp. made false statements about the quality of the securities they were hawking.

“The offering materials falsely represented that a stated set of underwriting guidelines would be followed,” the plaintiffs said. “An enormous…

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