CHICAGO - (CN) Online job finder CareerBuilder sued Bank of America for fraud on Wednesday saying the bank warned a big customer, the State of California, of instability in auction rate securities and then turned around and promoted those same securities to CareerBuilder as the sort of safe, liquid, short-term investment it was looking for.
The ARS market collapsed in February 2008 after BofA and other broker-dealers ceased 'manipulating the market to maintain the appearance of liquidity and stability,' leaving investors with $300 billion in unsellable securities, says the complaint.
Although BofA agreed to repurchase $4.7 billion in ARS from certain clients, CareerBuilder's accounts - $32 million - do not qualify for repurchase because they exceed the value permitted under the settlement. The action is filed by Jose Lopez with Schopf Weiss.
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