Prudential Sues Bank of America Over $2 Billion in RMBS

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On March 14, several Prudential entities filed suit in the United States District Court for the District of New Jersey against several Bank of America and Merrill Lynch entities in connection with Prudential’s investments in more than $2 billion in RMBS sold by the Defendants. The Complaint alleges that the Defendants made knowingly false statements of material fact and omissions regarding compliance with underwriting guidelines, omissions regarding due diligence results and misrepresentations as to owner-occupancy rates, appraisals, loan-to-value ratios, assignments of the loans underlying the securities to the trusts and the credit ratings of the securities. Prudential asserts causes of action for common-law fraud and fraudulent inducement, aiding and abetting fraud and fraudulent inducement, equitable fraud, negligent misrepresentation, violations of New Jersey’s civil RICO statute and violations of sections 11 and 12(a)(2) of the Securities Act of 1933. Complaint.

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Orrick - Structured Finance Group on:

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