[by Howard Haykin] U.S. District Judge Jed Rakoff in Manhattan has given his blessing and signed off on Bank of America Corp's agreement to pay $315 million to settle claims by investors who said they were misled into buying mortgage-backed securities offered by BofA's Merrill Lynch unit. In his written order, the judge stated that "the settlement is, in all respects, fair, reasonable, and adequate, and in the best interests of the settlement class members." It happens to be among the largest between a U.S. bank and investors over the sale of what were, at the time, seemingly safe mortgage-backed securities that ultimately turned toxic as housing conditions worsened. The Charlotte, NC-based bank is making every effort to address its legal liabilities stemming from its purchases of Merrill on 1/1/09, along with mortgage lender Countrywide Financial Corp. six months earlier. In This Case, ... investors led by the Public Employees' Retirement System of Mississippi pension fund accused Merrill of misleading them about the risks of $16.5 billion of MBS's sold off in 18 offerings during 2006 and 2007.  Claimants said Merrill's offering documents were misleading about the quality of the underlying home loans, which came from such lenders as Countrywide, Merrill's First Franklin unit, and the now-bankrupt IndyMac Bancorp Inc and New Century Financial Corp. In entering into the settlement, Bank of America did not admit nor deny any wrongdoing. Rakoff is the same judge who in November rejected Citigroup's agreement to pay $285 million to settle a fraud lawsuit brought by the SEC.  Judge Rakoff attacked the longstanding SEC practice of allowing companies to settle without admitting responsibility for any wrongdoing, and concluded that the accord did not serve the publi interest.  Citigroup and the SEC have appealed that decision - and it looks like they will win their appeal. Legal experts say the Citi case is different, and that consideration of the public interest need not have been a factor in Rakoff's review of the Bank of America settlement with private investors. The case is: Public Employees' Retirement System of Mississippi et al v. Merrill Lynch & Co et al, U.S. District Court, Southern District of New York, No. 08-10841. For plaintiff: David Stickney of Berstein Litowitz Berger & Grossman.   [Reuters, 5/8/12]