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 settlements with Bank of America involve 20 states: Alabama, California, Connecticut, Florida, Illinois, Kansas, Maryland, Massachusetts, Michigan, Missouri, Montana, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina and Texas.

"This settlement is only a first step in an ongoing investigation aimed at recovering restitution from the nation’s biggest financial institutions for relentlessly shortchanging taxpayers and nonprofits," Connecticut Gov. Richard Blumenthal said. "The conspiracy admitted by Bank of America deceived and defrauded municipalities and nonprofits in a web of bid rigging and deceptive conduct, costing millions and involving several of the country’s major financial institutions."

The SEC is investigating corruption in the industry for investing municipal bond proceeds. (AP)