SunTrust Sued For Alleged 401(k) Abuses


A suit filed in federal court in Atlanta by a former SunTrust Bank employee and 401(k) plan participant alleges that SunTrust violated federal retirement plan laws by selecting its own high-fee, poorly performing mutual funds for its 401(k) plan. See J. Scott Trubey’s article in the Atlanta Journal Constitution entitled “SunTrust faces suit over operation of 401(k).” The violations enriched SunTrust but cost plan participants more than $100 million dollars, according to the complaint.

The Employee Retirement Income Security Act of 1974 (ERISA) requires employers to act solely in the interest of a retirement plan’s participants. Such fiduciary duties are the highest duties known to the law. SunTrust’s actions constituted self-dealing in violation of ERISA, according to complaint.

Some of the SunTrust-controlled investment funds charged fees several times higher than comparable funds, and the company could have negotiated better fees with outside firms, according to the article.

Numerous other available investments and investment managers, such as The Vanguard Group, offered lower-cost, better-performing alternatives to SunTrust’s proprietary funds. SunTrust allegedly used some of these investment managers for its defined benefit plan, but not the 401(k) plan. If SunTrust had offered comparable Vanguard funds instead of its proprietary funds, participants would have earned approximately $110 million more for their retirement, according to the complaint.

The suit seeks certification as a class action on behalf of SunTrust 401(k) plan participants from 2002 to 2010. There are 34,000 members in the SunTrust 401(k) plan, which controls more than $2 billion, according to the article.

The case is Barbara J. Fuller, and all others similarly situated v. SunTrust Banks, Inc. et al., Case No. 1-11-CV-784-ODE, in the United States District Court for the Northern District of Georgia. Page Perry is co-counsel for the Plaintiff.

Page Perry has over 125 years collective experience representing institutional and individual investors in securities-related litigation and arbitration all over the country. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 40 occasions.