SunTrust Bank won summary judgement and dismissal on certain claims in the latest ruling in this case involving the offering of company stock within the SunTrust Banks, Inc. 401(k) Savings Plan. Plaintiffs claim breach of prudence on the basis of inside information that SunTrust failed to act upon (in accordance with applicable securities laws) to avoid large losses to participant accounts when SunTrust stock lost value. Other claims however were certified as class action.
- SunTrust defendants filed an expert report which reviewed the validity of the plaintiffs’ proposed alternatives, concluding that SunTrust could not have taken other actions suggested by the plaintiffs without violating securities laws or disadvantaging the plan. SunTrust was successful in arguing that the report should be considered should the case proceed to trial. The plaintiff’s motion to remove the report was denied.
- Plaintiffs succeeded in obtaining certification as a class, as described by the district court as “all persons, other than Defendants and members of their immediate families, who were participants in or beneficiaries of the SunTrust Banks, Inc. 401(k) Savings Plan at any time between May 15, 2007 and March 30, 2011 whose accounts included investments in SunTrust common stock and experienced losses in their SunTrust stock accounts. This identified class will argue that there were certain lawful actions SunTrust could have taken that could have prevented losses to participant accounts when the stock lost value.
- SunTrust was successful in arguing that claims brought by certain plaintiffs were in effect null and void, as these plaintiffs (or their beneficiaries) previously entered into a series of agreements which waived their rights to initiate or join class action lawsuits.
www.planadviser.com; August 22, 2016.