Bank of America is among the largest recipients of US government aid

Bank of America has agreed to pay a $33m (£19m) fine to settle charges that it misled investors about bonuses when it acquired Merrill Lynch in January.

Bank of America saved Merrill from collapse after telling its shareholders no bonuses would be paid to its executives without their approval.

However, Bank of America later authorised Merrill to pay up to $5.8bn in bonuses.

Bank of America was bailed out by the US taxpayer in 2008.

It needed $25bn in capital injections from the bail-out fund during the height of the financial crisis.

'Constructive conclusion'

On Monday, Bank of America agreed to pay the fine to settle the charges made by the US Securities and Exchange Commission (SEC).

"Bank of America believes that the settlement... represents a constructive conclusion to this issue," company spokesman Scott Silvestri said in a statement.

The bank has neither admitted nor denied the SEC allegations.

However, the SEC said its investigation was continuing.

The SEC said Merrill ended up paying £3.6bn in bonuses in 2008, even though it incurred heavy losses that year.

The settlement comes soon after the US House of Representatives voted in favour of legislation to stop banks paying bonuses that encourage excessive risk taking.

And a report last week, by the office of New York Attorney Andrew Cuomo, said there was "no clear rhyme or reason" for bankers' pay.

The findings suggested Wall Street banks that were bailed out by the government gave executives bonuses regardless of performance.