(Reuters) — A U.S. appeals court on Monday revived a lawsuit accusing Bank of America Corp. of defrauding Tutor Perini Corp. by selling the construction company millions of dollars of auction-rate securities it knew were on the brink of collapse.

The 1st U.S. Circuit Court of Appeals in Boston said a lower court judge erred in dismissing federal and Massachusetts state securities fraud claims against the second-largest U.S. bank.

Tutor Perini said Bank of America pushed it to buy auction-rate securities in late 2007 and early 2008 despite knowing the market was "one step away from illiquidity."

The $330 billion auction-rate market seized up in February 2008 when dealers stopped supporting it, saddling investors with illiquid debt that had often been marketed as a cash substitute.

In dismissing Tutor Perini's lawsuit in August 2015, U.S. District Judge Nathaniel Gorton said Bank of America made numerous disclosures to the Sylmar, California-based company and "had no duty to disclose all facts" reflecting the risks.

Writing for the appeals court, however, Circuit Judge Ojetta Rogeriee Thompson said deteriorating conditions might have obliged Bank of America to warn of new risks that made its earlier recommendations stale.

Citing emails, Thompson said "a reasonable jury could find that while (the bank) was taking steps to protect itself, it urged an unsuspecting Tutor Perini to walk right off the cliff."

Bank of America spokesman Lawrence Grayson declined to comment.

Tutor Perini estimates its losses at more than $50 million, including interest.

Its lawyer, George Carpinello, a partner at Boies, Schiller & Flexner L.L.P., said the company was "very pleased" with the decision.

"The court recited chapter and verse from Bank of America's own emails as to how the bank knew the market was on the verge of collapse, and decided that one way out of the crisis was to dump securities on unsuspecting investors," he said.

Bank of America was among more than one dozen companies that agreed to repurchase more than $61 billion of auction-rate securities to settle claims by Andrew Cuomo, then New York's attorney general and now its governor.

Tutor Perini said corporate investors such as itself were ineligible for these settlements.