SunTrust Sued For Auction Rate Securities
Earlier this week (April 2), a suit seeking class action against SunTrust Banks Inc., was filed on behalf of investors who purchased auction rate securities from SunTrust between April 1, 2003 and February 13, 2008. The suit alleges that the bank violated securities laws by "deceiving investors about the investment characteristics of auction rate securities and the auction market in which these securities traded."
Auction rate securities are corporate or municipal debt securities or preferred stocks, which pay interest based on rates set at periodic auctions. Auction rate securities generally have long-term maturities or no maturity dates.
According to the suit, the Atlanta based bank offered and sold auction rate securities to the public as suitable alternatives to money market mutual funds and as highly liquid cash-management vehicles. Given the collapse of the auction rate securities market owners are now unable to liquidate their holdings.
SunTrust released a statement on Thursday saying, "We believe the allegations are without merit and we intend to vigorously defend ourselves."
Similar suits have been filed against Citigroup, Merrill Lynch, Morgan Stanley, and UBS.
Page Perry, LLC is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry’s attorneys are actively involved in counseling institutional and individual investors regarding their auction-rate securities investment problems. For further information, please contact us.
