Learn what the following SunTrust Bank lawsuits could mean for you.
With assets more than $200 billion, SunTrust Bank is a subsidiary of a holding company called SunTrust Banks, Inc. SunTrust Bank operates nearly 1,500 branches and more than 2,200 ATMs throughout the southeastern region of the United States. The financial services company’s primary businesses are managing customer deposits, developing lending packages for businesses, and providing investment banking services for both individuals and companies.
In February of 2019, SunTrust Bank announced the purchase of BB&T for $28 billion in a financial transaction that involved the swapping of stocks. The two banks operate separately, but the companies have merged operating systems that include sharing the same IT platform.
SunTrust Bank has faced a number of class action lawsuits, with the company also running afoul with United States government regulators. The company reached a $968 million settlement with the United States government in 2014 for its “shoddy lending, servicing, and foreclosure practices.”
Let’s take a look…
Shareholder Class Action Lawsuit over SunTrust Bank Merger
In April of 2019, a class of SunTrust Bank shareholders filed a lawsuit to block a possible $66 billion merger between SunTrust Bank and BB&T Corporation. The lead plaintiff in the class action, who was a shareholder of SunTrust Bank, claimed the bank and its board of directors filed deceptive documentation with the Securities Exchange Commission (SEC). Moreover, the lead plaintiff alleged SunTrust Bank failed to reveal “material details” pertaining to the book values of the companies involved in the proposed merger.
According to paperwork filed with the class action lawsuit, SunTrust Bank and the company’s board of directors had a fiduciary responsibility to disclose the “material details” of the proposed merger before bringing the merger up for vote. The complaint asserted that SunTrust Bank “deliberately and negligently” misled shareholders.
“Absent disclosure of the foregoing material information prior to the stockholder vote on the Proposed Transaction, Plaintiff and the other members of the Class will be unable to make a fully-informed decision on whether to vote in favor of the Proposed Transaction and are thus threatened with irreparable harm warranting the injunctive relief sought herein.”
The class action lawsuit sought an injunction that postponed the shareholder vote until the defendants released the requested financial information.
Data Breach Class Action Lawsuit filed by Morgan & Morgan
In early 2018, Morgan & Morgan filed a class action lawsuit against SunTrust Bank alleging the financial services company exposed sensitive data and information that covered more than 1.5 million bank customers. Veteran class action attorneys John Yanchunis and Ryan McGee filed the class action lawsuit. Yanchunis was part of the legal team that filed the largest data breach class action lawsuit in American history.
“The lawsuit, which we filed on behalf of our clients and the 1.5 million consumers affected by the data breach, seeks to hold SunTrust accountable from its acknowledged failure to keep safe the information entrusted to it,” said Yanchunis. “In effect, SunTrust acted as the trustee for its customers, and it was the responsibility of SunTrust to ensure the security of customers’ information.”
SunTrust Bank released a statement on April 20, 2018 that confirmed the data breach. However, the class action lawsuit claimed the company discovered the massive data breach back in February of 2018. The two month lag period infuriated the members of the class that eventually filed the lawsuit. As opposed to most data breaches involving an external invasion, the data breach experienced by SunTrust Bank was conducted by an employee who accessed the bank’s computer information system network. Among the information stolen were addresses, account balances, and debit card numbers.
Settlement of National Mortgage Class Action Lawsuit
The United States government worked closely with the attorneys general from 49 states and the District of Columbia to reach a settlement that required SunTrust Bank to pay more than $500 million in relief to mortgage borrowers. The 2014 class action lawsuit settlement stemmed from numerous questionable lending practices that produced the housing bubble of 2008. Settlement details included admission by SunTrust Bank that the financial services company mishandled mortgage services and foreclosure practices. The settlement also forced SunTrust Bank to develop a $40 million fund for around 45,000 borrowers that received foreclosure notices between January 1, 2008 and December 31, 2013. In addition, the judge overseeing the class action lawsuit ordered SunTrust Bank to follow the servicing standards established by the 2012 National Mortgage Settlement (NMS) that involved the country’s five largest financial institutions.
Parts of an ERISA Class Action Lawsuit is Approved to Proceed
After conducting an extensive review of the accuracy of exert testimony delivered in a case involving the Employee Retirement Income Security Act (ERISA), a judge representing the United States District Court for the Northern District of Georgia issued a new order for the long standing class action lawsuit. In October 2019, the judge dismissed some of claims made in the lawsuit, while reinstating other claims as legally valid.
The class action lawsuit claimed the SunTrust Bank 401(k) plan involved a considerable amount of inside trading. Plaintiffs in the class action lawsuit alleged SunTrust Bank looked the other way when several employees claimed the bank participated in corporate self-dealing schemes. The lead plaintiff suggested the creators of the 401(k) plan selected a large number of proprietary funds called STI Class Funds that cost more than other funds, as well as underperformed compared to funds within the same fund classes.
The judge presiding over the class action lawsuit ordered the plaintiffs to file a consolidated pretrial order within 30 days of the new ruling.
Possible TCPA Violations
Written into federal consumer protection law in 1991, the Telephone Consumer Protection Act (TCPA) outlawed several previously acceptable telemarketing practices. In the highly competitive financial services industry, many banks implement telemarketing tactics to sell financial products like credit cards and investment products. Although SunTrust Bank has not participated in a TCPA-related class action lawsuit as of April 2020, there are indications a class is forming to file a claim that states the financial service company violated one or more provisions of the TCPA.
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