Takefuji Corp. sued Merrill Lynch Japan Securities Co. for about $309 million over losses on a 2007 bond deal designed to reduce the consumer lender's interest costs.

The lawsuit alleges that Merrill Lynch, now a unit of Bank of America Corp., failed to sufficiently explain the risks in the transaction, under which Takefuji invested in a credit-linked security created by the U.S. brokerage, Takefuji spokesman Kentaro Itai said in an interview.

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