Two years after SunTrust Bank sued an American International Group unit for fraud and breach of contract connected to AIG insurance policies covering soured mortgages, SunTrust is suddenly having to play defense.
On March 29, Richmond, Va., federal district court Judge Robert Payne sanctioned SunTrust’s mortgage division and criticized the bank’s lawyers at Reed Smith and Anderson Kill & Olick, concluding that a SunTrust employee willfully altered e-mails that in-house lawyers and senior management knew would likely be at the center of the litigation. SunTrust had discovered discrepancies in the e-mails — including one from Feb. 22, 2008, that was cited in the bank’s amended complaint — yet the bank made the “decision to bury its corporate head in the sand,” Payne ruled.
