Virginia Attorney General Mark Herring is suing some of the world's largest banks for $1.15 billion in damages related to the housing market crash.
Herring said at a news conference Tuesday that the banks misled the Virginia Retirement System about the quality of certain loans while selling mortgage-backed securities.
He said the VRS was forced to sell those securities because of the junk mortgages at a loss of $383 million. Herring is suing for three times the actual damages.
The lawsuit was unsealed Tuesday in Richmond Circuit Court. Herring said it is the largest financial fraud lawsuit ever filed by the Virginia.
The Democratic attorney general said nearly 40 percent of the 785,000 mortgages backing 220 securities purchased by VRS were of significantly higher risk than the banks had represented.