by Christopher Freeburn | September 28, 2012 1:05 pm
Bank of America (NYSE:BAC) announced on Friday that it will settle a class action lawsuit arising from its purchase of Merrill Lynch in 2008.
In addition to paying $2.43 billion, the bank has agreed to implement new governance rules relating to disclosure of noncompliance events, board of directors elections, future acquisitions, and executive compensation, CNN Money noted.
Investors sued the bank in 2009, claiming that it misrepresented the financial condition of Merrill Lynch when it merged with the foundering investment bank during the financial crisis.
Bank of America indicated that the settlement would result in a third-quarter charge of $1.6 billion. Shares of Bank of America dipped about 1% in Friday mid-day trading.
The acquisition of Merrill Lynch, estimated to cost $50 billion, proved disastrous for Bank of America.
After losses mounted and the extent of Merrill Lynch’s financial problems became known, Bank of America CEO Ken Lewis resigned.
Bank officials denied the charges made in the investor lawsuit, but said the bank wanted avoid the risk and uncertainty of a prolonged legal process.
In June, the bank settled a separate lawsuit over the Merrill Lynch acquisition for $20 million.
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