Associated Press | December 7, 2010

WASHINGTON (AP) -- The government says Bank of America's securities division has agreed to pay $137 million to settle allegations by federal and state authorities that it made illegal payments to win business from towns and cities looking to invest proceeds from municipal bond sales.

The Securities and Exchange Commission and other regulators announced the settlements with Banc of America Securities.

The securities unit agreed to pay $36 million in restitution to settle the SEC's civil fraud charges and $101 million to other federal and state authorities. The company neither admitted nor denied wrongdoing in agreeing to settle.

The SEC says Banc of America Securities paid undisclosed fees and kickbacks to municipal officials in return for the investment business.

The agency is investigating corruption in the industry for investing municipal bond proceeds.