The original Complaint alleges that SunTrust violated the securities laws by deceiving investors about the investment characteristics of Auction Rate Securities and the auction market in which these securities traded. Auction Rate Securities are either municipal or corporate debt securities or preferred stocks which pay interest at rates set at periodic "auctions." Auction Rate Securities generally have long-term maturities or no maturity dates.
Specifically, the Complaint alleges that, pursuant to uniform sales materials and/or top-down management directives, SunTrust offered and sold Auction Rate Securities to the public as highly liquid cash-management vehicles and as suitable alternatives to money market mutual funds. According to the Complaint, those who now hold Auction Rate Securities sold by SunTrust cannot liquidate their positions since the auction market for these securities has collapsed.
On September 17, 2008, U.S. District Judge Thomas W. Thrash, Jr. granted the motion to appoint Martin Zisholtz as Lead Plaintiff and approved Levi & Korsinsky, LLP and Law Offices of David A. Bain as Lead Counsel and Liaison Counsel for the Class, respectively. On November 24, 2008, the plaintiffs filed a First Amended Complaint. On December 24, 2008, the defendants filed a motion to dismiss the First Amended Complaint.
Before any ruling on the defendants' motion to dismiss the First Amended Complaint, the plaintiff filed a Second Amended Complaint on February 4, 2009. On February 24, 2009, the defendants filed a motion to dismiss the Second Amended Complaint. On September 24, 2009, Judge Thomas W. Thrash, Jr. signed an Order granting the Defendants’ Motion to Dismiss the Amended Complaint [Doc. 37], granting the Defendants’ Motion to Dismiss the Second Amended Complaint [Doc. 46], and denying the Plaintiffs’ Motion to Initiate Limited Discovery [Doc. 34]. Judgment was entered and the action was dismissed. The civil case is now terminated.