A federal judge has revived a securities fraud lawsuit accusing Bank of America Corp. Chief Executive Brian Moynihan, his predecessor Kenneth Lewis and others of misleading shareholders about the risk that the bank might have to buy back large amounts of soured mortgages, Reuters reported yesterday. U.S. District Judge William Pauley in July had dismissed various claims against the executives by shareholders led by the Pennsylvania Public School Employees' Retirement System while allowing their case against the second-largest U.S. bank to proceed. But Pauley said that the new allegations in an amended lawsuit "plausibly establish fraudulent conduct and a culpable state of mind as to all executive defendants" for allegedly concealing the buyback potential when certifying the bank's financials. He also said that Moynihan could be liable for statements that were inconsistent with a May 13, 2010, letter sent on his behalf to the Financial Crisis Inquiry Commission regarding the bank's securitization practices.
