NEW YORK / ORLANDO (Reuters) - New York's attorney general charged Bank of America Corp, former chief executive Kenneth Lewis and former chief financial officer Joe Price with fraud for allegedly misleading shareholders about the bank's acquisition of Merrill Lynch & Co.

Separately, the US Securities and Exchange Commission said the largest US bank agreed to pay a $150 million civil fine and strengthen disclosure and corporate governance to settle its two lawsuits alleging poor disclosure of Merrill's losses and bonus payouts. The accord requires court approval.

Invoking a powerful state law used to combat securities fraud, New York Attorney General Andrew Cuomo filed a civil lawsuit yesterday accusing Bank of America, Lewis and Price of intentionally failing to disclose massive losses at Merrill prior to a December 5 shareholder vote on the merger.

Cuomo alleged that after concealing the losses, the defendants misled the federal government in claiming that a "surprise" increase in Merrill's losses would allow Bank of America to back out of the merger if it did not get massive taxpayer help.

While Merrill lost $15.8 billion in the fourth quarter of 2008, just $1.4 billion occurred between the shareholder vote and when the bank starting to ring alarm bells in Washington, Cuomo said.

"The behaviour is just egregious and reprehensible," Cuomo said on a conference call. His office said the bank's current chief executive, Brian Moynihan, is not under investigation.

Bank of America ultimately got $20 billion of federal bailout money from the Troubled Asset Relief Programme, which the Charlotte, North Carolina-based lender has since repaid.

"Change is so obviously needed at Bank of America," lamented Neil Barofsky, the TARP special inspector general, on the conference call.

Bank of America spokesman Bob Stickler called the charges "regrettable" and said they lack merit.

"The evidence demonstrates that Bank of America and its executives, including Ken Lewis and Joe Price, at all times acted in good faith and consistent with their legal and fiduciary obligations," he said.

Lewis' lawyer Mary Jo White, a former US Attorney in New York and now a partner at Debevoise & Plimpton LLP, called the decision to sue "badly misguided", saying: "There is not a shred of objective evidence to support the allegations."

William Jeffress, a partner at Baker Botts LLP who represents Price, said his client also denied Cuomo's charges, adding that the allegation that he had deliberately pushed the bank to withhold information from shareholders was "utterly false".

Price recently became head of consumer and small business banking at Bank of America, while Lewis retired at the end of 2009 after a 40-year career at the bank.

"This is a serious blow for the bank," said Tony Plath, a finance professor at the University of North Carolina at Charlotte. "This doesn't look like it's going to go away anytime soon."

Cuomo, the SEC and Congress have long attacked the handling of the Merrill merger, which was put together over a weekend and announced on September 15, 2008, the same morning that Lehman Brothers Holdings Inc went bankrupt.

Critics have said Bank of America kept shareholders from learning of Merrill's losses on a timely basis and concealing that it had authorised the payment of $3.6 billion of bonuses.

"Throughout this episode, the conduct of Bank of America, through its top management, was motivated by self-interest, greed, hubris, and a palpable sense that the normal rules of fair play did not apply to them," the complaint said.

"Management thought of itself as too big to play by the rules and, just as disturbingly, too big to tell the truth," it added.