Countrywide, which was acquired by Bank of America Inc. in 2008, is being accused of massive fraud and misleading investors about mortgage-backed securities, according to a lawsuit filed Monday in the New York State Supreme Court.

The investors say they purchased millions of dollars of Countrywide mortgage-backed securities from 2005 to 2007 and believed they were getting low-risk investments. They accuse Countrywide of providing false documents about the investments.

The lawsuit is one of many against Countrywide, which also faces accusations that the firm made false statements to investors regarding Countrywide's mortgage-loan underwriting standards. Late last year, Countrywide co-founder and former CEO Angelo Mozilo agreed to pay a record-setting $67.5 million in a settlement to the U.S. Securities and Exchange Commission for allegations that he had misled investors.

Bank of America has declined to comment on the most recent case.

Source: Bank of America's Countrywide Accused in Suit of 'Massive Fraud,' BusinessWeek (Jan. 25, 2011)