Bank of America said Friday it will pay $2.43 billion to settle a class action lawsuit with investors who owned or bought its shares when it purchased Merrill Lynch in 2008.
Bank of America acquired Merrill in late 2008 in the depths of the financial crisis. The $50 billion deal came as Merrill was within days of collapse, effectively rescuing the bank from bankruptcy.
"Resolving this litigation removes uncertainty and risk and is in the best interests of our shareholders,” said Chief Executive Officer Brian Moynihan in a statement.
“As we work to put these long-standing issues behind us, our primary focus is on the future and serving our customers and clients,” he added.
Bank of America said the litigation will result in an expense of $1.6 billion for the quarter ending Sept. 30.
The bank also said it will institute certain corporate governance enhancements until January 1, 2015, under the settlement.
Plaintiffs had alleged, among other claims, that Bank of America and certain of its officers made false or misleading statements about the financial health of Bank of America and Merrill Lynch.
Bank of America denied the allegations and said it was entering into this settlement to eliminate the uncertainty and expense related to a long drawn-out litigation.
The settlement has to be approved by the U.S. district court for the Southern District of New York.
Bank of America is scheduled to report third-quarter results on October 17.
Reuters contributed to this report.
