NEW YORK, May 15, 2009 (GLOBE NEWSWIRE) -- Pomerantz Haudek Grossman & Gross LLP (www.pomerantzlaw.com) ("Pomerantz") has filed a class action in the United States District Court for the Northern District of Georgia against SunTrust Banks, Inc. ("SunTrust" or the "Company") (NYSE:STI) and certain of its top officials and underwriters. The class action was filed on behalf of those who acquired SunTrust Capital IX 7.875% Trust Preferred Securities issued by the Company in its February 2008 public offering. The Complaint alleges violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933.
SunTrust is a financial holding corporation, which provides a broad range of financial products and services to consumer and corporate customers in the United States and abroad. On February 27, 2008, SunTrust filed a prospectus supplement to a shelf registration statement/prospectus dated October 18, 2006, pursuant to which SunTrust sold 27.6 million units of the Trust Preferred Securities to the public at $25 per unit, for proceeds of approximately $690 million.
The Complaint alleges that the representations made in the Company's registration statement/prospectus were materially false and misleading because at the time of the offering: (i) the Company did not adequately disclose the extent to which its assets, including loans and mortgage-related securities, were impaired; (ii) the defendants failed to properly record losses for impaired assets, particularly with respect to the Company's Alt-A or "liar loan" portfolios; (iii) the Company's internal controls were inadequate to prevent the Company from improperly reporting the value of its assets; and (iv) the Company was not as well capitalized as it had publicly represented.
On January 22, 2009, SunTrust belatedly announced a significant increase in its provision for loan losses along with the release of its earnings for the fourth quarter of 2008. At that time, the Company reported its first quarterly loss in two decades and cut its quarterly dividend from $0.54 to $0.10 per share. When this news became public, the price of the Trust Preferred Securities began a precipitous decline.
If you purchased SunTrust Capital IX 7.875% Trust Preferred Securities in the February 2008 public offering, you have until Tuesday, July 14, 2009 to ask the Court to appoint you as lead plaintiff for the class. Shareholders outside the United States may join the action. If you wish to review a copy of the Complaint, would like to discuss this action, or have any questions, please contact Teresa L. Webb (tlwebb@pomlaw.com) of the Pomerantz Firm at 888.476.6529 (or toll-free at 888.4-POMLAW). Those who inquire by e-mail are encouraged to include their mailing address and telephone number.
The Pomerantz Firm, with offices in New York, Chicago, Washington, D.C., Columbus, Ohio and the San Francisco Bay area, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.