U.S. appeals court revives FDIC's bank lawsuit over Colonial collapse

May 19, 2016 2:12 PM

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NEW YORK A divided federal appeals court on Thursday revived an FDIC lawsuit accusing several major banks of helping cause the 2009 failure of Colonial BancGroup Inc by selling or underwriting toxic mortgage-backed securities that the Alabama lender bought.

By a 2-1 vote, the 2nd U.S. Circuit Court of Appeals in New York said the FDIC did not wait too long by waiting until August 2012, three years after it was appointed Colonial's receiver, to sue Citigroup Inc, JPMorgan Chase & Co and several other banks.

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