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Bank of America Settles Securities Class Action for $2.43 Billion

This is a settlement for the Securities/Stock Fraud lawsuit.

New York, NY: A securities class action against Bank of America Corp (BoFA) has reached a preliminary settlement with the bank agreeing to pay $2.43 billion to end claims it was not forthcoming with financial information about Merrill Lynch & Co to the banks shareholders, prior to BoFA buying the securities house.

BoFA agreed to buy Merrill Lynch in 2008, at the height of the financial crisis, however it tried to scrap the deal just weeks after signing but was unsuccessful. Merrill Lynch generated more than US$15bil of losses and its executives agreed to award employees up to US$5.8bil of bonuses, according to a report by Reuters.

In December 2008, BoFA' shareholders approved the Merrill Lynch deal, but once the merger was complete, there was a dramatic drop in BoFA share value, and investors subsequently sued, alleging Merrill' losses and bonuses should have been disclosed before the vote.

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Published on Oct-1-12


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