NEW YORK — A New York judge on Friday approved Bank of America's $2.43 billion settlement of a class-action lawsuit brought by shareholders over the company's acquisition of former competitor Merrill Lynch.
Judge Kevin Castel of the U.S. District Court for the Southern District of Manhattan approved the settlement, which addresses allegations that Bank of America did not disclose the state of its finances or those of Merrill Lynch when it agreed to buy Merrill in September 2008.
Bank of America said in September that it rejected the allegations and was agreeing to the settlement to end the uncertainties, burden and costs associated with the lawsuit.
The Charlotte, N.C., company agreed to buy Merrill Lynch for $20 billion in stock at the height of the financial crisis. The deal was struck the same weekend that Lehman Brothers collapsed. Bank of America later disclosed that Merrill Lynch was going to take $27.6 billion in losses that year. Bank of America later asked for a $20 billion bailout from the federal government to help counteract those losses.
Bank of America still faces a civil fraud lawsuit that accuses the company and former CEO Kenneth Lewis of failing to disclose the Merrill losses and bonuses before the acquisition closed.