A California state appellate court cleared the way on Thursday for a state class action lawsuit over billions of dollars of mortgage-backed securities to proceed against Countrywide Financial, a unit of Bank of America Corp (BAC.N).
The court reversed a 2010 state court decision that dismissed the mortgage-backed securities lawsuit against Countrywide because it was brought in state, not federal court, but cited claims under federal law.
The lawsuit, on behalf of all investors who purchased the hundreds of billions of dollars of Countrywide mortgage-backed securities, alleged the company published false and misleading registration statements and prospectuses.
Orville Armstrong wrote in an 11-page opinion the case could proceed in state court because it did not involve "covered securities," or those that trade on a national exchange.
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