Bank of America to Pay $2.43 Billion to End Lawsuit Over Merrill Lynch

Merrill Lynch NEW YORK -- Bank of America (BAC) says it has agreed to pay $2.43 billion to settle a class-action lawsuit related to its acquisition of Merrill Lynch.

The lawsuit was filed on behalf of investors that bought or held Bank of America stock when the company announced its plans to buy Merrill Lynch as the banking industry and federal government struggled to contain fallout from the financial crisis in the fall of 2008.

Among the plaintiffs allegations was that Bank of America and some of its officers made false or misleading statements about both companies' financial health.

In announcing the proposed settlement on Friday, Bank of America denied the allegations and says it agreed to the settlement to get rid of the uncertainties, burden and costs related to the lawsuit.

"As we work to put these long-standing issues behind us, our primary focus is on the future and serving our customers and clients," Bank of America CEO Brian Moynihan said in a statement.

The settlement still needs court approval and will be reviewed by Judge Kevin Castel in the United States District Court for the Southern District of New York.

As part of the settlement, the bank has also agreed to adopt several corporate governance policies until Jan. 1, 2015. These policies include those related to majority voting in board member elections, annual disclosure of noncompliance with stock ownership guidelines, policies for a board committee regarding future acquisitions, the independence of the board's compensation committee and its compensation consultants and conducting an annual "say-on-pay" vote by shareholders.

The bank said Friday that it will pay for the settlement with existing litigation reserves and about $1.6 billion in litigation expense that will be recorded in its third quarter. The company cautioned that this expense, coupled with some other charges, is expected to lower its third-quarter earnings by about 28 cents per share.

Bank of America will report its third-quarter financial results on Oct. 17.

Shares of Bank of America Corp. fell 7 cents to $8.90 in premarket trading Friday.


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mamboq7

Meanwhile, the ceo s and big wigs are getting MILLION dollar bonuses and life is good while the rest of us
lose our homes and security of retirement. so sad.

September 28 2012 at 8:55 PM Report abuse rate up rate down Reply
mamboq7

I am pleased to see BoA has been outed. One only hopes Wells Fargo will get their day in court. Those dirty rotten scoundrels. Nonetheless, BoA should be in forclosure and get a taste of their own evil.

September 28 2012 at 8:46 PM Report abuse rate up rate down Reply
montecomb1

Interesting slant...Merrill Lynch is what saved BOA's butt and is, in fact, what enabled them to pay off the Countrywide debacle. ML is THE only profitable arm of this cluster...

September 28 2012 at 7:35 PM Report abuse rate up rate down Reply
missmymind2353

WHAT A JOKE THE SYSTEM IS. TAXPAYERS BAIL OUT BANKS & INVESTMENT FIRMS SO THE CAN SETTLE A LAWSUIT.

September 28 2012 at 6:43 PM Report abuse rate up rate down Reply
missmymind2353

WHAT A JOKE THE SYSTEM IS. TAXPAYERS BAIL OUT BANKS & INVESTMENT FIRMS SO THE CAN SETTLE A LAWSUIT.

September 28 2012 at 6:43 PM Report abuse rate up rate down Reply
missmymind2353

WHAT A JOKE THE SYSTEM IS. TAXPAYERS BAIL OUT BANKS & INVESTMENT FIRMS SO THE CAN SETTLE A LAWSUIT.

September 28 2012 at 6:43 PM Report abuse rate up rate down Reply
natezim

I have a hard time accepting this settlement without criminal charges being instituted against the officers of the bank responsible for this fraud!!! Especially Lewis, the CEO at the time. He is a outright liar that walked away wilth millions and is most responsible for the fraud that was perpetrated!!

September 28 2012 at 1:31 PM Report abuse rate up rate down Reply
Bill

I HAVE 300 SHS OF B OF A, PURCHASED IN JUNE 2007 @ 50.538/SH. WITH THIS SETTLEMENT THE SHARE PRICE GOES INTO A FURTHER DECLINE. WHEN AND HOW DO WE GET ANY HEALING ON THESE UN APOLOGETIC THEIVES?

September 28 2012 at 11:08 AM Report abuse rate up rate down Reply
Bill

I HAVE 300 SHS OF B OF A, PURCHASED IN JUNE 2007 @ 50.538/SH. WITH THIS SETTLEMENT THE SHARE PRICE GOES INTO A FURTHER DECLINE. WHEN AND HOW DO WE GET ANY HEALING ON THESE UN APOLOGETIC THEIVES?

September 28 2012 at 11:08 AM Report abuse rate up rate down Reply
lpi2007

So for all you people who has a bank card from them " which I'm one of those " You'll get .01 cents and the attorneys get's 2.4999 billion dollars. Is life wonderful....

September 28 2012 at 10:41 AM Report abuse rate up rate down Reply