CHARLOTTE, N.C. — The multibillion-dollar settlement Bank of America announced Friday would resolve one of the most dramatic lawsuits to engulf the Charlotte bank after the financial crisis. It also will likely help propel the bank to a significant third-quarter loss.
The bank said Friday that it had agreed to pay $2.43 billion to settle a shareholder suit alleging the bank misled investors about the cost of acquiring Merrill Lynch.
The lawsuit, which also named then-CEO Ken Lewis and then-Chief Financial Officer Joe Price, came after Bank of America acknowledged ballooning losses at Merrill Lynch just months after the bank announced it would acquire the investment bank in a $50 billion deal.
The suit alleged that Lewis and other officers withheld information about the losses from shareholders before they voted on the deal.
The settlement — the largest of its kind, according to lawyers involved — must still be approved by a federal judge in New York. The money would mainly flow to pension funds that brought the suit, including the teachers’ and public employees’ retirement funds in Ohio, and their attorneys.
— From wire reports