ALBANY, N.Y. (AP) — Bank of America Corp. and former chief executive Kenneth Lewis reached a $25 million settlement to end an investigation into their actions in the 2008 merger with Merrill Lynch & Co., New York's attorney general announced Wednesday.
The civil fraud lawsuit accused them of failing to disclose Merrill losses and bonuses before the deal closed. The settlement requires the bank pay $15 million and continue certain corporate governance reforms. Lewis, now 67, is prohibited for three years from serving as an officer or director of a public company. He was ordered to pay $10 million.
Attorney General Eric Schneiderman, who inherited the case from predecessor Andrew Cuomo, said the settlement represented a victory in the continued commitment to apply the law equally to individuals and corporations.
"Since I took office, I've acted on the belief that no one, no matter how rich or powerful, should escape accountability for their actions, especially ones that caused such damage to shareholders," he said.
The bank acknowledged the settlement in a statement Wednesday, noting the $15 million reflects the attorney general's cost of investigation and litigation. Last year, Bank of America settled a related class-action shareholder lawsuit for $2.43 billion.
Attorney Bruce Yannett, representing Lewis, said his client relied on experienced legal counsel about disclosures. Yannett said Lewis is proud of his role helping the banking system survive a challenging period and he's pleased to the case behind him.
"The Merrill Lynch acquisition has since proven to be an unmitigated success for Bank of America and its stockholders," Yannett said.