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Withholding important information from their shareholders results in Bank of American Corporation paying a high monetary settlement, as reported by Reuters in an online article published September 28th, 2012.
Bank of America will be paying $2.43 million to shareholders who bought shares of the investment bank Merrill Lynch & Co. as a settlement for holding information during the financial crisis. The settlement reflects the numerous bad decisions that Bank of America made during the 2008 meltdown. As the bank’s competitors continue to move on since that period, Bank of America keeps finding themselves in the courtroom attempting to correct their past decisions.
This settlement, the largest of its kind thus far, stems from the merger of Bank of America and Merrill Lynch. In December 2008 the bank’s shareholder voted in favor of the merger however, after its completion the bank’s shares fell dramatically. Shareholders sued claiming that Merrill’s losses and bonuses were never disclosed to them prior to voting on the deal.
Overall the decisions that the bank made during 2008, which include the Merrill deal and purchasing the lender Countrywide Financial, have cost the bank in billions. The reached settlement agreement is to be approved by a Manhattan U.S. District Court on October 22nd. 2012. If it is approved, then the matter shall be considered resolved. The original settlement was rejected by the judge and the parties were forced to renegotiate the terms.
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