NEW YORK CITY-State Attorney General Andrew Cuomo on Thursday filed suit against Bank of America and its former CEO Kenneth Lewis and former CFO Joseph Price, charging that the banking giant misled shareholders and federal regulators over its merger with Merrill Lynch. The suit comes as the Securities and Exchange Commission announced a settlement with BofA.

Cuomo’s complaint, filed Thursday in state Supreme Court in Manhattan, charges that BofA hid Merrill’s “staggering losses” that had reached $16.2 billion by the time shareholders voted in December 2008 to approve the merger. Following the shareholders’ approval, BofA’s management then manipulated the federal government by falsely claiming that they would back out of the deal through a clause in the merger agreement unless they received billions of dollars in Troubled Assets Relief Program funds, according to the complaint.

“This was an arrogant scheme hatched by the bank’s top executives who believed they could play by their own set of rules,” Cuomo says in a statement. “In the end, they committed an enormous fraud and American taxpayers ended up paying billions for Bank of America’s misdeeds.”

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