Merrill Lynch & Co. will pay $550 million to settle two class action suits related to the financial institution's subprime mortgage-backed assets.

The State Teachers Retirement System of Ohio, lead plaintiff in one of the suits, on Friday accepted a $475 million settlement in a case filed in May 2008. The suit alleged that Merrill, now owned by Bank of America, made false and misleading statements concerning its exposure to subprime debt, which led to shareholder losses. Under the settlement, Merrill admits no wrongdoing.

The settlement is one of the first of the high profile subprime suits to settle and ranks among the twenty largest securities class action settlements ever, according to Kevin LaCroix, author of the blog the D&O Diary.

“It certainly does seem to suggest the possibility that these [subprime] cases will indeed be very expensive, in the aggregate, to resolve,” he said. “It's going to be very hard for litigants just to disregard the Merrill Lynch settlement. It clearly is significant not just for its size but for its potential implications for the other [subprime] suits that remain pending.”

Also on Friday, Merrill announced it would pay $75 million to settle similar subprime-related claims by company employee shareholders. LaCroix estimated it to be one of the largest Employee Retirement Income Security Act class action settlements ever.

The lawsuits focused on disclosures and losses between September 2006 and December 2008. The settlements do not cover shareholder derivative and bondholder claims, which Merrill continues to defend.