Bank of America Corp
According to the paper, the two sides met last Friday to discuss a possible deal and while no settlement had been reached, the talks were continuing.
The bank is also looking to settle claims that it failed to adequately disclose the risks of its takeover of Merrill to its shareholders, the paper said.
BofA did not immediately reply to an email seeking comment. The New York Attorney General's office was not available for comment outside regular U.S. business hours.
Andrew Cuomo asked eight major U.S. banks to turn over data on planned bonuses for 2009 on Monday, amid a growing public outcry over payouts in light of the industry's role in the near-collapse of the financial system and the recession.
(Reporting by Santosh Nadgir in Bangalore; Editing by Muralikumar Anantharaman)