Bank of America's (NYSE:BAC) Merrill Lynch unit is the latest litigation target of Allstate (NYSE:ALL), which has sued the division for fraud over mortgage-backed securities.
The lawsuit claims Merrill Lynch fraudulently sold the insurer close to $167 million in residential mortgage-backed securities.
Allstate is asking for the lost market value of the securities, plus principal and interest payments; the same it is asking a number of other financial institutions.
Allstate said in the complaint, “Because of the systemic abandonment of underwriting standards and the resulting inclusion of toxic, highly risky mortgage loans to back the certificates, most of Allstate’s certificates have been downgraded from the highest possible ratings to junk-bond ratings.”
Other financial institutions sued by Allstate include Credit Suisse (NYSE:CS), Citigroup (NYSE:C), Deutsche Bank (NYSE:DB) and JPMorgan (NYSE:JPM).
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