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October 24, 2012 at 08:00 PM
Bank of America reached a settlement to end a class-action lawsuit with investors and will pay $2.43 billion, while also making certain corporate-governance reforms, the firm said in late September. According to industry experts, the lawsuit and its resolution should have a negligible impact on the thundering herd of Merrill Lynch and Merrill Edge advisors.
The suit—which entails the biggest settlement arising from the 2008 financial crisis—was brought against the firm in 2009 in relationship to shareholders who purchased or held Bank of America securities when the company announced plans to acquire Merrill Lynch. Though it reached the settlement, BofA maintains that it did not make false or misleading statements about the financial health of the institutions involved in the merger.
“Resolving this litigation removes uncertainty and risk and is in the best interests of our shareholders,” said CEO Brian Moynihan in a press release. “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 governance reforms to be instituted or continued through early 2015 include measures associated with majority voting in director elections, the annual disclosure of noncompliance with stock ownership guidelines, policies for a board committee regarding future acquisitions, the independence of the board’s compensation committee and its compensation consultants and an annual “say-on-pay” vote by shareholders.
