Bank of America said Friday that it will pay $2.43 billion to settle a class action lawsuit with investors over its acquisition of Merrill Lynch at the height of the financial crisis.
In the 2009 lawsuit, investors claimed BofA made false or misleading statements about the financial health of both companies prior to the merger.
While BoFA denied the allegations, it said it agreed to settle to avoid a drawn out and expensive legal battle.
"Resolving this litigation removes uncertainty and risk and is in the best interests of our shareholders," said CEO Brian Moynihan in a statement. "As we work to put these long-standing issues behind us, our primary focus is on the future and serving our customers and clients."
BofA has faced an overwhelming amount of criticism from shareholders and lawmakers over its $50 billion acquisition of Merrill Lynch, which ultimately forced former BofA CEO Ken Lewis, who almost single-handedly pushed through the Merrill purchase, to step down from his post at the end of 2009. (Read more: Funky math helped BofA close Merrill deal)
As part of the settlement, BofA said it will also institute new corporate governance policies, including those relating to majority voting in director elections, annual disclosure of noncompliance with stock ownership guidelines, policies for a board committee regarding future acquisitions, the independence of the board's compensation committee and its compensation consultants, and conducting an annual "say-on-pay" vote by shareholders.
The Charlotte, N.C.-based bank also said it would log a litigation charge of about $1.6 billion in the third quarter related to the settlement.