SEC Sets up $150 Million Settlement Fund for Bank of America Corp (NYSE: BAC) Case

The U.S. Securities and Exchange Commission has setup a $150 million “fair fund” with money from Bank of America Corp (NYSE: BAC) which is to be distributed to its shareholders. The SEC claimed that Bank of America “failed to properly disclose employee bonuses and financial losses at Merrill Lynch before shareholders approved the merger of the companies in December 2008,” according to a press release.

The SEC said in a statement that those that qualify owned Bank of America stock at the close of trading on January 16^th, 2009, but those that received Bank of America stock as a result of an exchange from Merrill Lynch would not qualify. The release instructed shareholders to “Contact your broker to see if you had BAC stock on the required date. If you are not sure you are included, you can get more information at http://www.secbacfairfund.com/ or by calling toll-free 1-877-788-4952.”

In order to receive a settlement payment, shareholders “must send in a Claim Form. You can get a Claim Form at the website or by calling 1-877-788-4952. Claim Forms must be postmarked by November 12, 2010.” The release added, “The fair fund will pay eligible shareholders according to a Plan of Allocation. Your payment will depend on the number of (1) valid claim forms shareholders submit; and (2) eligible shares you held as of January 16, 2009. The Plan of Allocation is available at the website.”

Finally, the release said, “You will not be giving up any rights to sue Bank of America over any claims involved in this Settlement. You will be bound by all orders and judgments of the Court regarding the Plan of Allocation.”

Bank of America Corporation is a bank holding company, and a financial holding company. The Company is a financial institution, serving individual consumers, small and middle market businesses, large corporations and governments with a range of banking, investing, asset management and other financial and risk management products and services. Through its banking subsidiaries (the Banks) and various nonbanking subsidiaries throughout the United States and in selected international markets, it provides a range of banking and nonbanking financial services and products through six business segments: Deposits, Global Card Services, Home Loans & Insurance, Global Banking, Global Markets, Global Wealth & Investment Management (GWIM), with the remaining operations recorded in All Other. On January 1, 2009, the Company completed the acquisition of Merrill Lynch.

Shares of Bank of America Corp (NYSE: BAC) traded up 4.86% hitting $13.06 during mid-day trading on Tuesday.