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MBIA agrees to drop lawsuit against Bank of America

Bank of America Corp. got some good news today as bond insurer MBIA Inc. has agreed to drop a lawsuit against Merrill Lynch.

According to The Wall Street Journal, Armonk, New York-based MBIA had sued Merrill in 2009 after Charlotte-based BofA bought the investment bank. MBIA alleged that fraud had been committed by convincing the bond insurer to provide more than $5.7 billion in credit default protection for the bank’s mortgage-backed securities and that the bank hid that the supposed AAA-rated mortgage-backed securities were backed by poorly underwritten mortgages, the paper reported.

On Monday, BofA shares hit a 52-week low, closing around $10.35 a share. At one point, shares fell to as low as $10.30 Monday.

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