Continuing its efforts to put its legal problems behind it, Bank of America has agreed to pay $315 million to settle claims by investors that they were misled about mortgage-backed investments sold by its Merrill Lynch unit. The settlement in Public Employees Retirement System of Mississippi v. Merrill Lynch & Co., 08-cv-10841, was disclosed in court papers filed late Monday in the Southern District and requires the approval of Judge Jed S. Rakoff.
The settlement includes no admission of guilt from Bank of America, a fact that could give Judge Rakoff pause. Just last week, the judge struck down a $285 million settlement that Citigroup Inc. reached with the Securities and Exchange Commission. The settlement would have imposed penalties on Citigroup but allowed the company to deny allegations that it misled investors. Judge Rakoff said there was “an overriding public interest” in knowing the truth about cases that touch on “the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives” (NYLJ, Nov. 29).
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