BANK OF AMERICA TO PAY $2.43 BILLION SETTLEMENT FOR CLASS ACTION LAW SUIT

Bank of America says it has agreed to pay $2.43 billion to settle a class-action lawsuit related to its acquisition of Merrill Lynch at the height of the financial crisis.
In the lawsuit, the plaintiffs alleged that Bank of America and some of its officers made false or misleading statements about both companies' financial health.
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 in a $20 billion deal as the banking industry and federal government struggled to contain fallout from the financial crisis in the fall of 2008.

Bank of America's deal to buy Merrill Lynch was forged on the same September 2008 weekend that Lehman Brothers collapsed. The transaction came into question later after Bank of America disclosed that Merrill would post $27.6 billion in losses that year. That added significantly to Bank of America's financial woes, and the company subsequently asked for a $20 billion bailout from the government to help offset those losses, on top of the $25 billion it had already received. It has since repaid all $45 billion.
In announcing the proposed settlement on Friday, Bank of America denied the allegations and said that 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., which is based in Charlotte, N.C., fell 11 cents to $8.86 in premarket trading Friday.