According to a Bloomberg report, Bank of America Corp and chairman Kenneth Lewis will be settling claims filed by the state of New York over the bank's consolidation with Merrill Lynch & Co in 2009. Under the agreement reached by BofA, Lewis and Attorney General Eric Schneiderman, Lewis will be shelling out $10 million and will not be serving as an officer of a public company for three years for misleading investors about BofA's acquisition of Merrill. BofA, on the other hand, will pay $15 million to resolve the claims filed against them and will make reforms on corporate government, among other things.
Aside from the agreement it had reached with Lewis and BofA, the bank reportedly agreed to settle claims that it misled government-backed buyers to acquire mortgages packaged into bonds.
Schneiderman has said that the settlement was one of the first attempts by law enforcement to successfully hold a chief executive at a major company accountable since the 2008 financial crisis.
Lewis' lawyer, Bruce Yannett, said about the settlement, "Mr. Lewis consistently has made clear that the bank relied on experienced legal counsel --- both inside the bank and at a prestigious law firm -- with regard to what needed to be disclosed to shareholders. The Merrill Lynch acquisition has since proven to be an unmitigated success for Bank of America and its stockholders."
On the other hand, New York will still continue to pursue the case against former BofA chief financial officer Joe L. Price for his participation in the allegations, Schneiderman's office have said.
Price's lawyer, William Jeffress, told Bloomberg in an email, "We understand the bank and Ken Lewis have not admitted any wrongdoing but have accepted certain terms requested by the NYAG in order to put the matter behind them. Joe Price has made a different decision and we continue to defend the case."
