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SunTrust to settle 401(k) plan lawsuit for $4.8M

Atlanta-based SunTrust Banks Inc. agreed to pay about $4.8 million to settle allegations that it violated the Employee Retirement Income Security Act of 1974.

The U.S. District Court for the Northern District of Georgia Atlanta Division will conduct a fairness hearing on the settlement agreement on June 28.

Plaintiffs filed the first of several class-action complaints on July 11, 2008, alleging that the company breached its fiduciary duty by imprudently offering SunTrust common stock as an investment option in its 401(k) plan, while failing to disclose material information about its weakened financial position. In September 2009, the complaints were consolidated.

The lawyers for both sides met with a mediator in January and proceeded to negotiate the terms of the settlement.