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BofA settlements now total over $25-billion

A pedestrian walks past a Bank of America ATM in Charlotte, North Carolina July 17, 2009.


Bank of America is paying dearly for all the mistakes it made leading up to, and during, the financial crisis.

On Friday the bank announced yet another settlement, this time agreeing to pay $2.43-billion (U.S.) to settle a lawsuit from shareholders over its acquisition of Merrill Lynch.

That figure alone is big. But add up everything BofA's agreed to pay in the past few years, and you quickly hit $25-billion.

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There was the $8.5-billion payment to resolve the issue of selling bad mortgage-backed securities from its Countrywide division, $3-billion to settle an issue with Fannie Mae and Freddie Mac, $11.8-billion to "extend additional relief to homeowners who are struggling to make mortgage payments" as part of a deal with 49 state attorney generals and the U.S. Department of Justice, and now the Merrill settlement.

The latest settlement stems from a class action lawsuit filed by shareholders who alleged that Bank of America misled them when buying Merrill Lynch. One of the major accusations was that BofA hid a big loss at Merrill before the shareholder vote.

Still, BofA's stock is up 60 per cent this year.

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About the Author
Reporter and Streetwise columnist

Tim Kiladze is a business reporter with The Globe and Mail. Before crossing over to journalism, he worked in equity capital markets at National Bank Financial and in fixed-income sales and trading at RBC Dominion Securities. Tim graduated from Columbia University's Graduate School of Journalism and also earned a Bachelor in Commerce in finance from McGill University. More


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