Giuffra says Brown purchased stock as the company split in two, segregating the troubled financial securitization instruments from its healthier municipal bond business.

In a statement on its website, MBIA says, “Mr. Giuffra's accusations are false and irresponsible. All of Mr. Brown's stock purchases from the time he returned to the company in 2008, when plans for a restructuring to separate MBIA's insurance businesses were publicly announced, were approved in advance by counsel, fully disclosed, and in full compliance with both securities laws and company policies. Mr. Brown has not sold a single share of MBIA stock since his return in February of 2008.

“Mr. Giuffra is advancing these irresponsible allegations presumably out of frustration that all but four of his original 18 clients have dropped out of the litigation and that former [New York] Superintendent of Insurance, Eric Dinallo, has testified in detail as to the many valid reasons and justifications for approving MBIA's restructuring. However, that is no excuse for these false and irresponsible accusations, and MBIA and Mr. Brown intend to address them in the appropriate forums.”

While a state and federal judge listened to attorneys fling accusations at one another in a joint state and federal hearing in New York, another New York state judge listened to augments that an order to depose Bank of New York CEO Brian T. Moynihan was an act of harassment.

The case stems from losses MBIA and other guaranty insurers, including the second largest bond insurer at the time Ambac, experienced from their coverage of mortgage backed securities that put them on the hook for billions of dollars in claims during the economic collapse of 2008.

In 2009, MBIA restructured the company, placing the healthy portfolio of municipal bond insurance into National Public Finance Guarantee.

The banks have argued that by splitting the company, the insurer does not have enough reserves to cover losses for the structured financial instruments. They have also argued that the split was not properly vetted by then Insurance Superintendent Dinallo.

On a number of occasions, Brown has refuted this line of attack, saying the company has not failed to meet its insurance obligations. Indeed, it is the banks that have been at fault, misrepresenting the mortgages MBIA insured, which turned out to be sub-prime mortgages that the carrier says it had no intention of covering, he has said.

Friday's hearing tried to settle disputes in state and federal lawsuits, but no ruling was issued, the Times reported.

Bank of America declined to comment on the proceedings.