SunTrust Slapped With Auction Rate Securities Suit

Law360, New York (April 3, 2008, 12:00 AM EDT) -- SunTrust Banks Inc. has become the latest financial firm to face a lawsuit over auction rate securities since the bottom fell out of the market for those financial instruments in February.

A group of purchasers of the securities filed a proposed federal class action on Wednesday in the U.S. District Court for the Northern District of Georgia, alleging that the bank violated federal securities laws by deceptively marketing auction rate securities as essentially cash alternatives and failed to disclose their true risks.

The complaint was filed...
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