Market Overview

Bank Of America (BAC) To Settle Merrill Related Claims?

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According to the Wall Street Journal, a year after its controversial takeover of Merrill Lynch, Bank of America Corporation (NYSE: BAC) is discussing settling a troublesome state inquiry into the star-crossed deal and the billions of dollars in bonuses that Merrill hurriedly paid its employees.

As the banking industry braces for a furor over a new round of big bonuses, Bank of America is negotiating with the staff of the New York attorney general, Andrew M. Cuomo, to settle claims that the bank failed to adequately disclose the risks of the takeover to its shareholders, according to people with knowledge of the matter. Mr. Cuomo has also focused on the bonuses that Merrill paid despite its perilous financial condition, Louise Story reports in The New York Times.

While no settlement has been reached and the talks are continuing, Bank of America’s new chief executive, Brian T. Moynihan, is interested in bringing an end to myriad legal troubles plaguing the bank. The two sides met last Friday to discuss a possible deal.

The Merrill deal had taken a huge toll on Bank of America stock just after the deal was announced, along with a slew of other embarrassments emanating from the Merrill side. It seems as if the deal and its murky financial dealings are coming back to haunt Bank of America, and any closure on this front will require quick action and a swift and amicable settlement.

 

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Posted-In: Andrew Cuomo Brian Moynihan Louise Story Wall Street JournalNews Markets Media

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