MBIA Insurance Corp. and LaCrosse Financial Products have filed a lawsuit against Merrill Lynch, Pierce, Fenner and Smith Inc. and Merrill Lynch International over $5.7 billion of credit-default swap contracts. 

MBIA alleges Merrill Lynch made misrepresentations over the credit quality of collateral underlying the structured finance products MBIA insured, according to the lawsuit filed in New York Supreme Court. The lawsuit concerns structured finance products created by Merrill between July 2006 and March 2007.

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