This case is not as clear-cut as shady characters selling subprime paper while telling investors they were investing in safe government back student loans. Here is this case:

MBIA Inc., the largest bond insurer is suing two Merrill Lynch & Co. businesses, which are now owned by Bank of America Corp. over protection sold against mortgage-debt defaults.

According to a statement by Armonk, New York-based MBIA, the suit filed in New York State Supreme Court, is looking to unwind or recover payouts for $5.7-billion of credit-default swaps and related insurance sold against collateralized debt obligations.

MBIA Inc. in a statement said, as homeowner defaults began to soar, Merrill Lynch began misrepresenting the type of debts being protected, all a part of deliberately trying to offload billions of dollars worth of deteriorating sub-prime mortgages between July 2006 and March 2007.