NEW YORK - A Manhattan federal judge gave final approval to Bank of America Corp's $150 million settlement with the U.S. Securities and Exchange Commission over the takeover of Merrill Lynch & Co at the peak of the financial crisis.

U.S. District Judge Jed Rakoff signed off on the settlement on Wednesday, two days after indicating he would approve the terms, despite his reluctance to vet what he considered half-baked justice at best.

Rakoff preferred that shareholders not be responsible for paying the fine and, on Monday, may have aided shareholder lawsuits against the bank when he said prudent shareholders, had they known all the facts, would have thought twice about approving the merger or might have sought its renegotiation.

The SEC had accused Bank of America of misleading shareholders about Merrill's rising losses, which totaled $15.8 billion in the fourth quarter of 2008 and that it allowed Merrill at the same time to pay out $3.6 billion of bonuses.

Wednesday's so-called consent judgment calls for the Charlotte, North Carolina-based bank to pay the $150 million into a fair fund to be disbursed to harmed shareholders.

It also calls for governance changes over a three-year period. Among these are the hiring of an independent auditor to oversee the bank's disclosures, the hiring of a pay consultant, increased independence for directors who set compensation and the giving to shareholders of an advisory say on pay for top executives.

Wednesday's settlement has no impact on New York Attorney General Andrew Cuomo's separate civil fraud lawsuit against the bank, former Chief Executive Kenneth Lewis and former Chief Financial Officer Joe Price for their roles in the merger.

Rakoff rejected in September a $33 million settlement with the SEC concerning just the disclosures about bonuses.

Bank of America shares closed up 39 cents, or 2.4 percent, at $16.33. They are down 52 percent since the bank agreed on Sept. 15, 2008, to buy Merrill.

The cases are SEC v. Bank of America Corp, U.S. District Court, Southern District of New York, Nos. 09-06829 and 10-00215. (Reporting by Jonathan Stempel; editing by Andre Grenon)