NEW YORK -- A federal bankruptcy judge has thrown out the Federal Deposit Insurance Corp.'s claim that Thomson McKinnon Securities Inc. defrauded a New Jersey thrift in the sale of $31 million in mortgages, lawyers in the case said.

The FDIC has alleged that Thomson McKinnon, which filed for bankruptcy protection in 1990 and is no longer operating, defrauded Lincoln Federal Savings and Loan Association of Westfield, N.J., because it had not reviewed the soundness of the mortgage sale that it arranged. Lincoln Federal is also defunct.

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