Kentucky’s largest state-chartered bank has filed suit against Merrill Lynch for $40 million over failed securities bought through the investment firm. Pikeville-based Community Trust Bank filed the suit in federal court on December 31st. Community Trust Bank claims it now holds $9.9 million in worthless securities because of the deal. Community Trust says in the suit that it bought the securities in January 2006 based on Merrill Lynch’s assertion that the securities were “safe short-term investments.” The securities were linked to Fannie Mae, the mortgage giant that was taken over by the federal government and stopped paying dividends.
Source: Associated Press
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