BofA Pays $2.43 Billion to Settle Merrill Lynch Suit
Rather than fight its way through court, Bank of America has dipped into its “litigation reserves” to settle a shareholder lawsuit over the dubious methods it used to acquire Merrill Lynch as the credit crisis ramped up.
Rather than fight its way through court, Bank of America has dipped into its “litigation reserves” to settle a shareholder lawsuit over the dubious methods it used to acquire Merrill Lynch as the credit crisis ramped up.
Investors sued the bank in 2009, saying its leaders misrepresented the financial well-being of both institutions at the time of the purchase. Bank of America denied the allegation, saying it was “entering into this settlement to eliminate the uncertainties, burden and expense of further protracted litigation.”
The bank bought Merrill Lynch for $50 billion on Sept. 15, 2008, the day Lehman Bros. collapsed.
As part of the settlement, Bank of America agreed to some vague improvement of its “corporate governance policies,” and to allowing shareholders to offer input — but not to decide — on executive pay.
— Posted by Alexander Reed Kelly.
Wait, before you go…The Guardian:
The move initially won praise for saving Merrill from possible collapse, but investors soon soured as it emerged that Merrill’s debts were far worse than first thought, reaching $15.84bn in the fourth quarter of 2008. The bank was also intending to honor $3.6bn in bonuses for Merrill’s top executives.
In a scathing memoir released this week, Sheila Bair, the former head of the Federal Deposit Insurance Company, said Ken Lewis, then Bank of America’s chief executive, was viewed as “somewhat as a country bumpkin by the CEOs of the big New York banks, and not completely without justification. He was a decent traditional banker, but as a deal-maker his skills were clearly wanting.”
If you're reading this, you probably already know that non-profit, independent journalism is under threat worldwide. Independent news sites are overshadowed by larger heavily funded mainstream media that inundate us with hype and noise that barely scratch the surface. We believe that our readers deserve to know the full story. Truthdig writers bravely dig beneath the headlines to give you thought-provoking, investigative reporting and analysis that tells you what’s really happening and who’s rolling up their sleeves to do something about it.
Like you, we believe a well-informed public that doesn’t have blind faith in the status quo can help change the world. Your contribution of as little as $5 monthly or $35 annually will make you a groundbreaking member and lays the foundation of our work.
Support Truthdig
Lessons learned from the 2008 financial crisis show that taxpayer-funded blank checks to institutions do nothing to help those struggling
Its ruling on whether to make it easier for the president to fire the consumer financial law enforcement chief could affect other agencies.
A Business Roundtable statement about the purpose of corporations shows that ruling elites fear their crimes are coming back to haunt them.
The 43rd president—besides leaving the domestic economy in ruins—bequeathed a disastrous foreign policy.
The U.S. government is unnecessarily feeding the “financialized” economy in which money makes money without producing new goods and services.
Seth Frotman, in a scathing resignation letter to acting director Mick Mulvaney, says the agency “has turned its back on young people and their financial futures."
There are currently no responses to this article.
Be the first to respond.