NEW YORK, May 23, 2008 (PRIME NEWSWIRE) -- The Securities Law Firm of Klayman & Toskes, P.A. ("K&T") (http://www.nasd-law.com) announced today that it filed a lawsuit against SunTrust (NYSE:STI) with the Financial Industry Regulatory Authority's ("FINRA") Office of Dispute Resolution. According to the Complaint, SunTrust recommended that the Claimants purchase Nuveen Auction Rate Preferred Securities ("ARPS"). SunTrust represented the ARPS to be conservative, safe, liquid investments. Not having been advised of the risk and ability for illiquidity, the Claimants purchased the Nuveen ARPS. Today, about $1.6 million of the Claimants' money remains frozen due to continued failed auctions. Had all of the risks associated with the Nuveen ARPS been fully disclosed to the Claimants, they would not have invested millions of dollars into these securities.
The arbitration claim filed against SunTrust seeks rescission as a result of the brokerage firm's misrepresentations and omissions, breach of fiduciary duty, breach of contract, fraud, constructive fraud, negligence and gross negligence, violation of NASD and NYSE rules, violation of state securities laws, and violation of The Securities Exchange Act of 1934. Many brokerage firms, including SunTrust, marketed Auction Rate Securities to be "safe", "liquid" investments that were akin to money market funds. However, since the week of February 11, 2008, many auctions have failed and the clients' investments have become illiquid as buyers have become scarce. As a result, many investors no longer have access to their money which was placed in Auction Rate Securities.
Many investors of Auction Rate Securities did not envision the scenario in which they would have to retain the services of an attorney to withdraw their money. Unfortunately, however, to the extent investors cannot liquidate their Auction Rate Securities on the secondary markets that have opened up, it appears that legal action is necessary if investors are to see a return of their money in the near future. In that regard, Klayman & Toskes reminds investors of the benefits of filing an individual arbitration claim, as opposed to participating in a class action lawsuit. By participating in a class action lawsuit, an investor will most likely recover only pennies on the dollar. In 2003, Klayman & Toskes conducted a study of securities arbitration versus class action. The study concluded that investors who file a securities arbitration claim may obtain an overall higher rate of recovery as opposed to participating in a class action lawsuit. To view the full results of the comparison, please visit our web-site: http://www.nasd-law.com/documents/classvr.pdf
Klayman & Toskes continues to file arbitration claims on behalf of numerous investors who no longer have access to their money invested in Auction Rate Securities. In addition to the lawsuit filed against SunTrust, the Law Firm most recently filed claims against Wachovia (NYSE:WB) and Banc of America (NYSE:BAC). If you invested $500,000 or more in Auction Rate Securities, including Nuveen Auction Rate Securities, from SunTrust, Wachovia, Banc of America, or other brokerage firm, or if you have information relevant to our claims, please contact Steven D. Toskes, Esquire or Jahan K. Manasseh, Esquire of Klayman & Toskes, P.A., at 888-997-9956. You may also visit us on the web at http://www.nasd-law.com.
Klayman & Toskes, P.A., an experienced and nationally recognized securities litigation law firm, continues its representation of investors throughout the world in securities arbitration and litigation matters against major Wall Street brokerage firms.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca