Merrill Lynch

MBIA Sued over Business Split 

Monoline bond insurer MBIA faces a lawsuit by 18 financial firms over its decision to split its mortgage exposures off of its municipal-bond insurance portfolio. The allegations claim MBIA’s split and the resulting transfer of $5bn out of its main insurance business to a muni-bond insurance company constituted an unlawful effort to escape contractual obligations to cover mortgage security-related losses, according to a report filed at the Wall Street Journal.