WASHINGTON (AP) — Bank of America says it has agreed to pay $2.43 billion to settle a class-action lawsuit related to its acquisition of Merrill Lynch at the height of the financial crisis.

In the lawsuit, shareholders alleged that Bank of America and some of its officers made false or misleading statements about both companies' financial health.

The lawsuit was filed on behalf of investors who bought or held Bank of America stock when the company announced its plans to buy Merrill Lynch in a $20 billion deal as the banking industry and federal regulators struggled to contain fallout from the financial crisis in the fall of 2008.

Bank of America's deal to buy Merrill Lynch was forged on the same September 2008 weekend that Lehman Brothers collapsed. The transaction came into question later after Bank of America disclosed that Merrill would post $27.6 billion in losses that year. That added significantly to Bank of America's financial woes, and the company subsequently asked for a $20 billion bailout from the government to help offset those losses, on top of the $25 billion it had already received. It has since repaid all $45 billion.

In announcing the settlement proposal on Friday, Bank of America denied the shareholders' allegations and said that it agreed to the settlement to get rid of the uncertainties, burden and costs related to the lawsuit.

"As we work to put these long-standing issues behind us, our primary focus is on the future and serving our customers and clients," Bank of America CEO Brian Moynihan said in a statement.

The investors who filed the suit said the amount of the settlement is the largest ever resolving such a claim.

"We are very pleased that the settlement will recoup a substantial portion of the losses incurred by (Bank of America) shareholders," Brian Guthrie, executive director of the Teacher Retirement System of Texas, said in a statement. "The magnitude of the recovery reinforces the important role that pension funds play when they serve as lead plaintiffs in securities actions."

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Two of Ohio's public pension funds also were among the plaintiffs in the case. Ohio Attorney General Mike DeWine told reporters at a news conference in Columbus that Bank of America didn't tell investors all the details about the huge losses that were occurring in Merrill's fourth quarter.

"There was general reference to losses, but never was the magnitude of those losses disclosed," DeWine said. "This would be akin to telling someone to watch out for a pothole, when they were about to fall into the Grand Canyon."

The settlement still needs court approval and will be reviewed by Judge Kevin Castel of U.S. District Court for the Southern District of New York.

As part of the settlement, the bank has also agreed to adopt several corporate governance policies until Jan. 1, 2015. These policies include those related to majority voting in board member elections, annual disclosure of noncompliance with stock ownership guidelines, policies for a board committee regarding future acquisitions, the independence of the board's compensation committee and its compensation consultants and conducting an annual "say-on-pay" vote by shareholders.

Bank of America, based in Charlotte, N.C., has been dogged by litigation as the consequences of the financial crisis continue to swirl around it. Most of the legal headaches stem from Bank of America's acquisitions of Merrill and of Countrywide Financial, the brash company known for making high-risk mortgages.

The Securities and Exchange Commission won a $150 million settlement from Bank of America in 2009 to resolve charges that it misled shareholders when it acquired Merrill. The SEC had accused Bank of America of failing to disclose to shareholders before they voted on the Merrill deal that it had authorized Merrill to pay as much as $5.8 billion in bonuses to its employees in 2008 even though the investment firm lost $27.6 billion that year.

But a major civil fraud suit against Bank of America and former CEO Kenneth Lewis remains pending from New York state, accusing them of failing to properly disclose the Merrill losses and bonuses before the acquisition closed. The suit was filed by former New York attorney general Andrew Cuomo in February 2010, and the current AG Eric Schneiderman is pursuing it. The bank has said the charges are unfounded.

Countrywide had spiraled into disaster as investors suddenly realized that many homeowners wouldn't be able to repay mortgages that required no proof of income or downpayment, and offered adjustable rates that made monthly payments unaffordable.

The Countrywide purchase in July 2008 made Bank of America a major player in the U.S. mortgage market. Regulators, meanwhile, portrayed Countrywide's huge size as the result of its executives single-minded pursuit of market dominance, even if it meant taking disastrous risks.

In the legal aftermath, Bank of America entered an $8.4 billion settlement with 12 states over Countrywide's lending practices. A class-action suit by former Countrywide shareholders cost the bank another $600 million. Bank of America has paid out more than $13 billion for investor claims related to mortgages.

Both acquisitions turned out to be "very troublesome" for Bank of America, said Bert Ely, a banking industry consultant based in Alexandria, Va. "They're still cleaning up the mess," Ely said, and likely will have to continue to deal with it for a few more years.

Bank of America's mortgage division hasn't turned an annual profit since 2007.

After years of gobbling up other companies, the bank has been shrinking, laying off employees and selling operations.

"The challenge is trying to right-size the company" and get its earnings up to snuff, Ely said. The bank "still is not a top-notch performer. It has got more work to do," he said.

Fitch Ratings said it views the settlement as "a positive step for (Bank of America) toward resolving its multitude of legal issues." However, the rating agency added, given that other legal issues remain, "we believe these will continue to create headwinds for the company over a near- to intermediate-term time horizon, from the perspective of both management attention and earnings generation."

Bank of America said Friday that it will pay for the settlement with existing litigation reserves and about $1.6 billion in litigation expense that will be recorded in its third quarter. The company cautioned that this expense, coupled with some other charges, is expected to lower its third-quarter earnings by about 28 cents per share.

Bank of America will report its third-quarter financial results on Oct. 17.

Shares of Bank of America Corp. fell 14 cents to $8.83 in trading Friday. It shares peaked for the past year at $10.10 on March 19 and traded as low as $4.91 in mid-December 2011.

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Associated Press Writer Ann Sanner in Columbus, Ohio, contributed to this report.