Bank of America Corp.'s $2.4 billion settlement with investors who lost money as a result of the bank's acquisition of Merrill Lynch & Co. was approved by a federal judge.
U.S. District Judge Kevin Castel in Manhattan said in a hearing today that the settlement is "fair, reasonable and adequate," and he granted it final approval.
"This was the antithesis of a collusive settlement," Castel said. "This was a hard-fought settlement."
Bank of America, based in Charlotte, North Carolina, reached the settlement in September, weeks before a trial was scheduled to begin in the case. In addition to paying $2.4 billion in cash, the bank agreed to make reforms to its corporate governance.
The settlement resolves shareholder litigation led by institutional shareholders including the Ohio Public Employees Retirement System. The investors claimed Bank of America failed to disclose information about losses at Merrill Lynch and bonuses paid to Merrill Lynch employees before the brokerage was acquired by Bank of America in January 2009 for $18.5 billion.
The case is: In re Bank of America Corp. (BAC) Securities, Derivative and ERISA Litigation, 09-md-2058, U.S. District Court, Southern District of New York (Manhattan).