WASHINGTON – Bank of America said 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, shareholders 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 who 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 regulators 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.