And there’s more…

28 September 2012 By Antony Currie Follow @AntonyMCurrie

The bank is paying $2.4 bln to settle a lawsuit that it misled shareholders in the 2008 takeover of Merrill Lynch. It’s by no means the biggest cost of the ex-CEO’s disastrous takeover binge. But it’s still painful. And successor Brian Moynihan still has more tabs to pick up.

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Bank of America agreed on Sept. 28 to pay $2.43 billion to settle a lawsuit from a group of shareholders. The group had accused the bank and its executives of making false or misleading statements about the health of the bank and that of Merrill Lynch, the investment bank BofA agreed to buy in late 2008.

Shareholders in the group include the State Teachers Retirement System of Ohio, the Ohio Public Employees Retirement System and the Teacher Retirement System of Texas.

BofA, which settled the suit but denied the allegations, expects to incur litigation expenses of $1.6 billion for the quarter in addition to what it has already set aside for the case. The bank also announced that it expects third-quarter earnings to be hit by a $1.9 billion pre-tax loss from marking to market the improvement in its credit spreads and by a previously announced $800 million income tax charge related to changes in the UK corporate tax rate and the related effect on deferred tax asset valuation.

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Shareholders in the group include the State Teachers Retirement System of Ohio, the Ohio Public Employees Retirement System and the Teacher Retirement System of Texas.

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