Fifteen former Countrywide Financial institutional investors have sued Bank of America, claiming they lost money after they were misled about the mortgage house's financial condition and lending practices. 

The investors - including BlackRock, CalPERS, T Rowe Price, TIAA-CREF - decided to start their own suit in a Los Angeles federal court after abstaining from a $624mn settlement won in February.  The plaintiffs felt they would recover more money by starting their own suit.  The complaint, which numbers 425 pages, accuses Countrywide of imprudent lending and says the lender did not have large enough reserves to cover bad loans. 

The suit adds to a laundry list of problems Bank of America has had to deal with regard to Countrywide, which BofA acquired for $2.5bn in July 2008. Last month, Bank of America signed an $8.5bn agreement to settle the majority of suits from investors who bought securities backed by Countrywide home loans. 

Since purchasing Countrywide, BofA shares have plummeted nearly 60%.  [NY Post, 7/30/11]