A federal judge approved the creation of a $150 million fund for Bank of America Corp
The SEC alleged in a lawsuit filed last year that BofA, in the months before it bought the investment bank in January 2009, failed to disclose $3.6 billion in bonuses Merrill Lynch paid its employees and $15.8 billion in fourth-quarter 2008 losses at the investment bank.
As part of the settlement, BofA agreed to pay $150 million into a fair fund to be distributed to owners of BofA stock who were injured by the alleged misconduct, according to the fund's website.
The judge's approval of the fund was announced by the SEC on Wednesday. A spokesman for Charlotte, North Carolina-based BofA America was not immediately available for comment.
Shareholders who owned BofA stock as of January 16, 2009, are eligible for payouts from the fund. Shares received as part of the Merrill buyout are excluded from receiving compensation.
Eligible shareholders must submit a claim form by no later than November 12 to receive a payout from the fund.
Last year, U.S. District Court Judge Jed Rakoff rejected an initial settlement of $33 million. He said the settlement was too lenient and did not hold individuals at BofA responsible.
Rakoff approved the $150 million settlement on February 22, 2010.
BofA shares up 63 cents, or 5 percent, to $13.07 in morning trade on the New York Stock Exchange.
The cases were SEC v. Bank of America Corp, U.S. District Court, Southern District of New York, Nos, 09-06829 and 10-00215.
(Reporting by Joe Rauch, editing by Gerald E. McCormick and John Wallace)