Merrill Lynch & Co. (MER) on Tuesday said it will pay $100 million to settle a probe by the New York State Attorney General into charges it tailored its stock research to win investment banking business.

Merrill, which did not admit any wrongdoing, will make a payment of $48 million to New York state, and an additional payment of $52 million to other U.S. states, Merrill said in a statement. 

The settlement was reached after hours of negotiations on Monday.

Merrill, the No. 1 U.S. brokerage, will completely separate analyst compensation from its investment banking business and its analysts will only be compensated for those activities and services intended to benefit Merrill's investor clients, Merrill said.

Merrill will create a committee to review all stock ratings for objectivity and rigorous analytical framework, Merrill said. The firm will also institute a new system to monitor electronic communications between bankers and analyst, it said.

New York State Attorney General Eliot Spitzer's office unveiled the interim results of a probe into Merrill's Internet group in early April. Spitzer released e-mails and other documents showing that Merrill analysts including its star Web analyst Henry Blodget had privately derided stocks to which they had given top investment ratings.

The e-mails and documents also indicated that Merrill had compensated its Internet analysts in part based on how much investment banking business they had helped to win. Spitzer charged that the evidence released showed that Merrill had violated New York State securities law, and he refused to rule out bringing criminal charges against Merrill and its Internet analysts.

Spitzer also broadened his probe by sending subpoenas to other top Wall Street investment firms. The evidence uncovered by Spitzer led other prosecutors and regulators including the Securities and Exchange Commission also to launch probes of Wall Street research. Spitzer has been backed in his expanded investigation by a 12-state task force of state securities regulators.