Washington, D.C., United States (AHN) – A federal judge has approved a settlement between Bank of America (NYSE: BAC) and the Securities and Exchange Commission, ending a drawn-out lawsuit over actions during the Merrill Lynch acquisition.
Judge Jed Rakoff, who previously shot down a $33 million settlement between the bank and SEC, approved a $150 million agreement that will keep the case from going to trial. The lawsuit was due for trial on March 1.
Rakoff approved the agreement provided the two parties produce a new draft for him by Thursday with the revisions that have been agreed upon.
The settlement puts to rest two lawsuits by the SEC against Bank of America. One claimed the bank misled investors about losses at Merrill Lynch and failed to disclosure material financial information in the time leading up to a shareholder vote on the transaction.
The other accused Bank of America of misleading shareholders in regard to bonuses paid out by Merrill, which ended up topping $3 billion despite the investment bank posting a $15.8 billion loss during the quarter the deal was made.
According to the agreement, Bank of America must implement and maintain a number of undertakings, including the hiring of a compensation committee consultant who meets”super-independence” criteria.
The bank’s chief executive and chief financial officers must also certify that they reviewed all annual statements and merger proxy statements.
