Federal Judge Kevin Castel, of the Southern District of New York, will review a deal that would put to rest claims about Bank of America's alleged lack of honest communication with shareholders just before they voted on the $50 billion purchase of Merrill Lynch in December 2008.
Shareholders claimed they were misled or kept in the dark about Merrill Lynch's financial difficulties when they approved the purchase. Bank of America Corp. agreed to a $2.4 billion settlement in September but admitted to no wrongdoing, the Charlotte (N.C.) Observer reported Thursday.
A judge still has to approve the deal for the bank that was also the target of multiple lawsuits concerned with its 2008 purchase of mortgage lender Countrywide Financial, just before the housing market imploded.
In spite of the billions the bank has spent on legal fees since the financial crisis knocked the banking industry for a loop in 2008, "Litigation appears to have only accelerated over the last 12 months as private investors, correspondents and various government agencies continue to pursue legal claims against the largest banks," wrote industry analysts at Sterne Agee & Leach.
"In particular, we remain concerned with BAC's potential litigation and outstanding mortgage repurchase risk," the analysts wrote.
The deadline to join the current class action suit is April 25, the Observer said.
Shareholders are eligible to join if they owned Bank of American common shares on Oct. 10, 2008 or if they purchased common shares from Sept. 18 2008 through Jan. 21, 2009, the newspaper said.
A few others are also eligible.