SunTrust Units Fined $5M For ARS Practices

Law360, New York (July 26, 2011, 5:00 PM EDT) -- The Financial Industry Regulatory Authority announced Tuesday that it was fining two SunTrust Banks Inc. subsidiaries $5 million for misleading investors about the risks of the auction rate securities market.

SunTrust Robinson Humphrey Inc., the corporate and investment banking arm that underwrote the ARS, agreed to pay $4.6 million and SunTrust Investment Services Inc. will shell out $400,000 to resolve claims that it failed to disclose the increasing risks of investing in ARS, FINRA said.

SunTrust encouraged its sales representatives to peddle the ARS as safe...
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