Signet Banking Corp. has been hit with a second lawsuit stemming from its leadership of a loan participation gone awry.

Bank of Montreal, which had the largest exposure to the $324 million participation, sued Signet last Friday for $87.3 million, alleging negligence, negligent misrepresentation, and breach of contract. The suit, filed in U.S. District Court for the Southern District of New York, argues that Signet should have discovered that the loans to a company supposedly involved in top secret research for the Philip Morris Cos. were apparently fraudulent.

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