Andrew Burton/Getty ImagesEric T. Schneiderman, the New York attorney general, has reached other settlements with Bank of America and its executives. The New York state attorney general announced Friday that the office had reached a $7.5 million settlement with Joe L. Price, the former chief financial officer for Bank of America, over allegations that the bank’s management withheld material information related to its 2008 merger with Merrill Lynch.
The attorney general, Eric T. Schneiderman, accused Bank of America’s top executives, including Mr. Price, of failing to disclose more than $9 billion of projected losses at Merrill Lynch to Bank of America shareholders before a vote on the acquisition.
The settlement is the latest move in Mr. Schneiderman’s broader crackdown on the Wall Street executives who led some of the country’s largest financial institutions during the crisis. Last month, Mr. Schneiderman’s office reached a $10 million settlement related to the Merrill Lynch merger with Bank of America and its former chief, Kenneth D. Lewis, who stepped down in 2009.
“This settlement is one more step in our effort to hold top financial executives accountable for their actions,†Mr. Schneiderman said in a statement announcing the news on Friday. “As with our settlement last month with C.E.O. Kenneth D. Lewis, today’s action sends a message that conduct harming investors, shareholders, and the public will not go unpunished.â€
A lawyer for Mr. Price, Colby A. Smith, declined to comment.
As part of the settlement, Mr. Price will not be able to serve as an officer or director of a public company for 18 months. The $7.5 million payment will be used to pay for the costs associated with the attorney general’s investigation, according to court filings.
The attorney general’s office said that it had found evidence that the bank had not only concealed information about Merrill’s financial condition from shareholders, but from the federal government as well. The bank, according to Mr. Schneiderman’s office, sought significant aid from the government during the crisis, but did not disclose what it knew about Merrill’s projected losses until the beginning of 2009.
The ghosts of the financial crisis continue to haunt Wall Street’s largest institutions, even after their top leadership has changed.
The Justice Department is said to be seekingbillions of dollars from Bank of America to settle a civil inquiry into the bank’s sale of toxic mortgage investments before the financial crisis.
And in January, Morgan Stanley revealed that it recorded a $1.2 billion charge to help pay for its legal bills had contributed to a $1.1 billion pretax loss in its institutional securities unit, which houses mortgage lending and trading operations.
