The complaint names Countrywide, various subsidiaries that issued the securities, two former company executives including ex-CEO Anthony Mozilo, and Bank of America, which bought Countrywide in 2008.
The list of a dozen plaintiffs includes New York Life Insurance, TIAA-CREF Life Insurance and Dexia Holdings.
According to the complaint, the investors bought hundreds of millions of dollars of Countrywide securities from 2005 to 2007 that they thought were ‘conservative, low-risk investments’.
The plaintiffs alleged that Countrywide misrepresented the securities’ safety in offering documents and elsewhere, and compromised their investments by ignoring its underwriting guidelines.
According to the lawsuit, materials that Countrywide subsidiaries circulated to potential investors indicated all the mortgage-backed securities had been assigned investment-grade ratings, and most had top-rung "AAA" ratings.
The lawsuit seeks unspecified damages for alleged securities fraud.
