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Bank of America Corp.'s $2.4 billion settlement with investors who lost money as a result of the bank’s acquisition of Merrill Lynch & Co. was approved by a federal judge, Bloomberg News reported on Friday. U.S. District Judge Kevin Castel said in a hearing on Friday that the settlement is “fair, reasonable and adequate,” and he granted it final approval. Bank of America, based in Charlotte, N.C., reached the settlement in September, weeks before a trial was scheduled to begin in the case. In addition to paying $2.4 billion in cash, the bank agreed to make reforms to its corporate governance. The pact resolves shareholder litigation led by institutional shareholders including the Ohio Public Employees Retirement System.

MF Global on Friday won court approval of a plan to liquidate its assets, pay back creditors and end the $40 billion bankruptcy that rocked the financial world in 2011, Reuters reported on Friday. The commodities brokerage, run by former New Jersey Governor Jon Corzine, collapsed after investors were spooked by its exposure to about $6.3 billion in European sovereign debt. The approval marked a major step in ending the massive chapter 11 filing, as MF Global is now able to implement the plan and pay creditors. The case became a political firestorm after it was discovered that about $1.6 billion was missing from the accounts of the broker's commodities trader customers. Regulators later determined that MF Global had misappropriated the customer money to cover liquidity gaps as it faltered.

The trustee winding down Lehman Brothers' broker-dealer business is facing opposition from Barclays PLC to his plan to allocate more than $15 billion to the unit's customers, Dow Jones Daily Bankruptcy Review reported today. Lehman trustee James Giddens and Barclays have been fighting over more than $5 billion in assets for years. Barclays says that it acquired the assets when it bought Lehman's broker-dealer unit in September 2008.

Banks are lobbying against international plans to tighten rules on securitization claiming they will tie up capital and starve the economy of credit, Bloomberg News reported today. Credit Suisse Group AG, BNP Paribas SA and Deutsche Bank AG are among lenders that have written to the Basel Committee on Banking Supervision in Switzerland to voice concern about reforms to be implemented from 2014. Regulators are overhauling the rules after the widespread use of the technique in the U.S. mortgage market contributed to the financial crisis by spreading risk from lenders to the "shadow banking" sector. The firms say that the plans, which will force banks to hold more capital against any tranche they keep, would make transactions prohibitively expensive. In recent months, banks have begun to look again at securitizations as a way of meeting the higher capital targets—without cutting lending or raising fresh equity. The committee at the Bank for International Settlements in Basel will carry out an impact study of the securitization proposals in the coming weeks, said Bill Coen, the group’s deputy secretary general. The plans are likely to be on the agenda for the June meeting, he said.

The Federal Reserve approved a final rule yesterday that brings the government closer to placing large nonbank companies that were at the heart of the financial crisis under stricter supervision, the Washington Post reported today. The rule leaves a strikingly wide swath of companies on the table as potentially falling under tougher oversight, including private-equity firms and hedge funds. Yet industry officials and others following the process say it is unlikely that officials will ultimately single out more than a handful of firms. Any final decision by officials will be closely watched by Wall Street, since a company designated by the government as "systemically important" would face tougher capital standards, among other restrictions, that could eat into the firm’s profitability. It has taken federal regulators nearly three years since the passage of Dodd-Frank, the country’s overhaul of Wall Street rules, to define which nonbank companies, if they were to fail, could threaten the integrity of the country’s financial system. Yesterday's move indicates that the Financial Stability Oversight Council, an interagency panel of regulators, is in the final stages of reviewing institutions. Regulators say they will vote in the next few months on which companies will fall under increased scrutiny.

Thirty state attorneys general are investigating alleged interest-rate rigging by banks that set Libor, and the probe is not slowing despite a U.S. judge's ruling last week in favor of the banks in private lawsuits, the Wall Street Journal reported today. The number of states involved in the coordinated probe has grown substantially in recent months and could result in enforcement actions seeking billions of dollars in damages. New York and Connecticut are leading the investigation, which has widened to include Arizona, Delaware, Iowa and Maryland. It is not clear when the probe will be completed or which banks could be most vulnerable. But state officials are plowing ahead even though the judge threw out proposed class-action lawsuits and suits filed by Charles Schwab Corp. alleging wrongdoing by banks related to the London interbank offered rate and other interest-rate benchmarks.

The push to change Barclays from a predominantly British retail bank to a global financial giant over the last two decades created a culture that put profit before customers, according to a report released yesterday, the New York Times DealBook blog reported. The independent review, which was ordered by the bank’s top management in the wake of a rate-rigging scandal last year, highlighted an "at all costs" attitude, particularly within the firm's investment bank, that was reinforced by a bonus system that encouraged taking risks over serving clients. "Barclays became complex to manage," said the report, which was overseen by Anthony Salz, former head of the law firm Freshfields Bruckhaus Deringer. "The culture that emerged tended to favor transactions over relationships, the short term over sustainability and financial over other business purposes."

MBIA Inc., the bond insurer suing Bank of America Corp. to recover losses tied to mortgage loans, won an appeals court ruling that the lender could be required to repurchase securitized loans even if they are not in default, Bloomberg News reported yesterday. MBIA is entitled to have Bank of America buy back a performing loan that it can prove "materially and adversely" affected its interest, the New York state appeals panel said in a decision yesterday, reversing part of a ruling by a lower court. The panel also reversed a decision that MBIA could seek so-called rescissory damages. The decision stems from MBIA's lawsuit against Bank of America and its Countrywide Financial unit. MBIA, which sued Countrywide in 2008, guarantees payments to investors that bought securities backed by pools of the lender's loans. The insurer says the loans were riskier than represented by Countrywide, and as the loans went into default, the Armonk, N.Y.-based company was forced to pay investors.

McGraw-Hill Cos. accused the U.S. Justice Department of failing to disclose in court its collaboration with 17 states suing its Standard & Poor’s unit over alleged consumer-protection and unfair-trade violations, Bloomberg News reported yesterday. McGraw-Hill raised the issue in a letter to a federal judge in Connecticut as it fought to consolidate the state lawsuits in U.S. court while the Justice Department pushes to keep the cases under state jurisdiction. The New York-based company has filed papers in several federal courts seeking to move the cases. The Justice Department and state attorneys general sued S&P in February. The U.S. accused the company of falsely representing that its ratings were objective and independent, claiming Standard & Poor's weakened ratings criteria to maintain and increase market share.

A federal judge yesterday signaled that he will not rubber-stamp Citigroup Inc.'s proposed $590 million settlement of a shareholder lawsuit accusing it of hiding tens of billions of dollars of toxic mortgage assets, Reuters reported yesterday. U.S. District Judge Sidney Stein asked lawyers for the bank and its shareholders to address several issues at an April 8 fairness hearing, including requested legal fees and expenses of roughly $100 million, and the absence of payments by former Citigroup executives. Citigroup awaits a decision from the federal appeals court in New York on whether Stein's colleague Jed Rakoff properly rejected a $285 million settlement with the U.S. Securities and Exchange Commission over the alleged defrauding of investors. The $590 million settlement resolved claims by Citigroup shareholders from February 26, 2007 to April 18, 2008 that the bank failed in those years to properly write down risky debt, often backed by subprime mortgages, and concealed the risks.