Participants in SunTrust Bank’s 401(k) plan got the okay to proceed as a class with their claims that the bank breached its ERISA fiduciary duties.
Bloomberg reports that the case alleges 401(k) plan sponsors allowed poorly performing SunTrust stock as an investment option in the plan.
“Judge Richard W. Story of the U.S. District Court for the Northern District of Georgia Aug. 17 granted the participants’ motion to certify a class that could include thousands of members,” the news service reported on Monday. “However, Story streamlined the participants’ lawsuit by granting partial summary judgment to SunTrust in relation to the claims raised by five participants who released their claims in a severance agreement they signed with the bank.”
According to Bloomberg, the plaintiffs’ amended complaint alleges that SunTrust allowed the imprudent investment of the plan’s assets in the bank’s stock despite knowing that such investment was “unduly risky” for retirement savings accounts.
“According to the class, SunTrust stock was an imprudent investment between 2007 and 2011 due to the “serious mismanagement” of the company as well as the artificial inflation of the company stock, which declined 73 percent during that period.”