SunTrust 2013 Annual Report Download - page 211

Notes to Consolidated Financial Statements, continued
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whether the named plaintiff could have opted out for the putative class members. SunTrust filed an appeal of this decision,
but this appeal was dismissed based on a finding that the appeal was prematurely granted. On April 8, 2013, the plaintiff filed
a motion for class certification and that motion is pending.
Putative ERISA Class Actions
Company Stock Class Action
Beginning in July 2008, the Company and certain officers, directors, and employees of the Company were named in a putative
class action alleging that they breached their fiduciary duties under ERISA by offering the Company's common stock as an
investment option in the SunTrust Banks, Inc. 401(k) Plan (the “Plan”). The plaintiffs purport to represent all current and
former Plan participants who held the Company stock in their Plan accounts from May 2007 to the present and seek to recover
alleged losses these participants supposedly incurred as a result of their investment in Company stock.
The Company Stock Class Action was originally filed in the U.S. District Court for the Southern District of Florida but was
transferred to the U.S. District Court for the Northern District of Georgia, Atlanta Division, (the “District Court”) in November
2008.
On October 26, 2009, an amended complaint was filed. On December 9, 2009, defendants filed a motion to dismiss the
amended complaint. On October 25, 2010, the District Court granted in part and denied in part defendants' motion to dismiss
the amended complaint. Defendants and plaintiffs filed separate motions for the District Court to certify its October 25, 2010
order for immediate interlocutory appeal. On January 3, 2011, the District Court granted both motions.
On January 13, 2011, defendants and plaintiffs filed separate petitions seeking permission to pursue interlocutory appeals with
the U.S. Court of Appeals for the Eleventh Circuit (“the Circuit Court”). On April 14, 2011, the Circuit Court granted defendants
and plaintiffs permission to pursue interlocutory review in separate appeals. The Circuit Court subsequently stayed these
appeals pending decision of a separate appeal involving The Home Depot in which substantially similar issues are presented.
On May 8, 2012, the Circuit Court decided this appeal in favor of The Home Depot. On March 5, 2013, the Circuit Court
issued an order remanding the case to the District Court for further proceedings in light of its decision in The Home Depot
case. On September 26, 2013, the District Court granted the defendants' motion to dismiss plaintiffs' claims. Plaintiffs have
filed an appeal of this decision in the Circuit Court.
Mutual Funds Class Action
On March 11, 2011, the Company and certain officers, directors, and employees of the Company were named in a putative
class action alleging that they breached their fiduciary duties under ERISA by offering certain STI Classic Mutual Funds as
investment options in the Plan. The plaintiff purports to represent all current and former Plan participants who held the STI
Classic Mutual Funds in their Plan accounts from April 2002 through December 2010 and seeks to recover alleged losses
these Plan participants supposedly incurred as a result of their investment in the STI Classic Mutual Funds. This action was
pending in the U.S. District Court for the Northern District of Georgia, Atlanta Division (the “District Court”). On June 6,
2011, plaintiff filed an amended complaint, and, on June 20, 2011, defendants filed a motion to dismiss the amended complaint.
On March 12, 2012, the Court granted in part and denied in part the motion to dismiss. The Company filed a subsequent
motion to dismiss the remainder of the case on the ground that the Court lacked subject matter jurisdiction over the remaining
claims. On October 30, 2012, the Court dismissed all claims in this action. Immediately thereafter, plaintiffs' counsel initiated
a substantially similar lawsuit against the Company substituting two new plaintiffs and also filed an appeal of the dismissal
with the U.S. Court of Appeals for the Eleventh Circuit. SunTrust filed a motion to dismiss in the new action and this motion
was granted. This decision also is now on appeal to the Eleventh Circuit.
Consent Order with the Federal Reserve
On April 13, 2011, SunTrust Banks, Inc., SunTrust Bank, and STM entered into a Consent Order with the FRB in which
SunTrust Banks, Inc., SunTrust Bank, and STM agreed to strengthen oversight of, and improve risk management, internal
audit, and compliance programs concerning, the residential mortgage loan servicing, loss mitigation, and foreclosure activities
of STM. Under the terms of the Consent Order, SunTrust Bank and STM agreed, among other things, to: (a) strengthen the
coordination of communications between borrowers and STM concerning ongoing loss mitigation and foreclosure activities;
(b) submit a plan to enhance processes for oversight and management of third party vendors used in connection with residential
mortgage servicing, loss mitigation and foreclosure activities; (c) enhance and strengthen the enterprise-wide compliance
program with respect to oversight of residential mortgage loan servicing, loss mitigation and foreclosure activities; (d) ensure
appropriate oversight of STM's activities with respect to the Mortgage Electronic Registration System; (e) review and
remediate, if necessary, STM's management information systems for its residential mortgage loan servicing, loss mitigation,
and foreclosure activities; (f) improve the training of STM officers and staff concerning applicable law, supervisory guidance
and internal procedures concerning residential mortgage loan servicing, loss mitigation and foreclosure activities, including
the single point of contact for foreclosure and loss mitigation; (g) retain an independent consultant to conduct a comprehensive
assessment of STM's risks, including, but not limited to, operational, compliance, transaction, legal, and reputational risks