(Image source: Bloomberg )



BY DANNY MATTESON

 

ANCHOR LOGAN TITTLE


It may not break the bank but Bank of America’s pockets will soon be a little lighter. Fox Business explains.  

 

“Bank of America has reached a settlement in the Merrill Lynch acquisition related class action lawsuit. Under the terms of the settlement the banking giant will pay 2.4 billion dollars and institute corporate governance policies.”



Suit was brought against the bank for allegedly misrepresenting the fiscal health of both Bank of America and Merrill Lynch prior to the $50 billion purchase of the struggling financial management company in 2008. Ohio Attorney General and lead plaintiff Mike DeWine told CNBC ...

 

“We’re very, very happy with this. We think it is a just settlement. Bank of America did things they should not have done. They did not disclose the information.”

 

And although Bank of America’s CEO is surely unhappy with the payout — he is happy to be putting the situation behind the company. He told Bloomberg ...

 

“Resolving this litigation removes uncertainty and risk and is in the best interests of our shareholders.”

 

Beyond financial penalties Bank of America will also institute new corporate governance policies which according to the New York Times will include a “say on pay” shareholder vote. an independent compensation committee of the board, 
and policies for committees focused on acquisitions.



And by settling Bank of America can avoid at least a little bit of the legal hot water. Forbes points out...


“... the proposed settlement, which has to be approved by a judge, helps clear up somewhat BofA’s long list of legal battles stemming from the financial crisis."



Shares of Bank America’s stock dropped 12 cents to $8.85 per share following the news of the settlement on Friday.