Bank of America announced Friday that it has agreed to pay $2.43 billion to settle a shareholder suit alleging the bank misled investors about the cost of acquiring Merrill Lynch.
The lawsuit, which also named then-CEO Ken Lewis and other bank executives, came after Bank of America acknowledged ballooning losses at Merrill Lynch just months after the bank announced it would acquire the investment bank.
The suit alleged that Lewis and other officers withheld information about the losses from shareholders before they voted on the deal.
The settlement must still be approved by a federal judge in New York.
"Resolving this litigation removes uncertainty and risk and is in the best interests of our shareholders," CEO Brian Moynihan said 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."
The bank will report third quarter earnings Oct. 17. This settlement is expected to add an extra $1.6 billion in expenses. Accounting charges related to the market value of the bank's debt and a tax hit from a U.K. policy change will combine with the litigation expense to knock 28 cents per share off the bank's earnings.
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