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February 23, 2010

Morgan Keegan Ordered by FINRA Panel to Pay Investor $2.5 Million for Bond Fund Losses

A Financial Industry Regulatory Authority panel has ordered Morgan Keegan & Co. to pay investor Andrew Stein $2.5 million because the bond funds that he invested in had bet poorly on mortgage-related holdings. Panel members found Morgan Keegan liable for failure to supervise, negligence, and for selling investments that were unsuitable for Stein and his companies. The claimants, who sustained financial losses, had initially sought $12 million.

Stein’s arbitration claim is just one of over 400 securities claims that have been filed against Morgan Keegan over its bond funds that had invested in subprime-related securities, such as CDO’s (collateralized debt obligations). When the US housing market collapsed, the funds went down in value by up to 82%.

Stein contends that Morgan Keegan did not reveal the kinds of risks involved in investing in the bond funds. He and his companies claim that Morgan Keegan artificially increased the fund assets’ value so that the funds would appear more stable and investors wouldn’t be able to see the actual risks involved.

At least 80 of the securities cases have been heard, and claimants have so far been awarded $10.1 million. Morgan Keegan says that while it has settled a number of securities claims over the bond funds, claimants have dropped 114 other cases.

Stein and his two companies are pursuing a securities claim against Regions Financial and Morgan Asset Management, Inc. They are claiming fraudulent pricing and valuation of funds.

Our securities fraud law firm represents clients that sustained financial losses as a result of investing in Morgan Keegan bond funds. Please contact us for your free case evaluation.

Related Web Resources:
Morgan Keegan Must Pay Investor, Wall Street Journal, February 22, 2010

FINRA

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Posted In: Arbitration , Bond Funds , FINRA , Financial Firms , Morgan Keegan , Regions Financial Corporation , Securities Fraud

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February 8, 2010

Claims Filed Against Morgan Keegan Division of Regions Financial Causes Shortage of Arbitrators

The Financial Industry Regulatory Authority has had to bring in hundreds of additional arbitrators to deal with the approximately 400 securities fraud claims that investors have filed against Regions Financial Corp., the investment banking unit of Morgan Keegan & Co. Investors are seeking to recover $35 million after three of its mutual funds dropped in value by up to 82% when the housing market fell apart. The Region Financial Corp mutual funds contained subprime-related securities, including collateralized debt obligations, low-quality mortgages, and mortgage-backed securities.

Morgan Keegan claims that it notified investors of the risks associated with investing in the mutual funds. Regions says that to date, 79 arbitration cases have been heard. 39 of the cases were dismissed and 114 arbitration claims seeking $24 million were dropped before decisions were reached. The investment firm is putting up a tough fight against the complaints. So far, arbitrators have been awarded $7.6 million.

Because so many investors filed arbitration claims, FINRA has had to contact arbitrators in different parts of the US and ask them to come to the different cities where the hearings on the mutual funds are talking place. The average pool of arbitrators in each city is now approximately 721 persons. This is an increase from its previous average pool of 87 arbitrators.

Stockbroker fraud attorney William Shepherd says that his securities fraud law firm Shepherd Smith Edwards and Kantas, LLP is committed to helping investors recover their financial losses related to Regions Financial Corp mutual funds. “Our law firm is handling dozens of claims nationwide regarding these funds, each on an individual basis. Some law firms have grouped claims and are using other methods we believe do not properly serve victims. This has skewed results against investors.” SSEK offers prospective clients a free case evaluation.

Related Web Resources:
Arbitrator Out of Work? Call Finra, The Wall Street Journal, February 5, 2010

FINRA

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Posted In: Financial Firms , Morgan Keegan , Mutual Funds , Regions Financial Corporation

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July 16, 2009

Stockbroker Fraud Law Firm Shepherd Smith Edwards and Kantas, LLP Files Claims Against Morgan Keegan Following SEC Wells Notice

Last week, the Staff of the Atlanta Regional Office of the US Securities and Exchange Commission sent Morgan Keegan & Co, Inc., Morgan Asset Management, Inc., and three employees a “Wells” notice. The notice stated the Staff’s intention to recommend that the Commission bring enforcement actions over possible federal securities laws violations. Morgan Keegan, is a subsidiary of Regions Financial Corporation.

The Staff had been investigating a number of mutual funds that Morgan Asset Management had previously managed. In light of the Wells notice, the securities fraud law firm of Shepherd Smith Edwards and Kantas, LLP is continuing to file arbitration claims against Morgan Keegan for covering up the risks associated with their bond funds.

Our investor clients are accusing Morgan Keegan of selling specific funds that it promoted as relatively conservative investments when in fact, the funds were exposed to subprime mortgage securities, collateral debt obligations, and other high risk debt instruments. Investors are alleging that Morgan Keegan took part in a scam that defrauded investors of certain bond funds while misrepresenting their degree of involvement in more high risk investments. As a result, our investor clients suffered major financial losses after the subprime mortgage market collapsed.

The Allegations Against Morgan Keegan Name a Number of RMK Funds, including:

• RMK Multi-Sector High Income Fund
• RMK Select High Income Fund
• RMK High Income Fund
• RMK Select Intermediate Bond Fund
• RMK Advantage Income Fund
• RMK Strategic Income Fund

**A Wells notice is not a formal charge or official finding of wrongdoing. It gives the recipients a chance to offer their accounts about the issues raised by the notice before the Commission takes any formal action.

Our securities fraud law firm is comprised of a team of experienced stockbroker fraud attorneys, consultants, and others. Over the years, we ‘ve taken our more than 100 years of combined experience in securities law and the securities industry to help thousands of investors recoup their losses.

Shepherd Smith Edwards and Kantas, LLP successfully represents clients in matters of arbitration, mediation, negotiation, and litigation. Our investor fraud cases have been heard in state and federal courts, as well as in arbitration before the Financial Industry Regulatory Authority, the American Arbitration Association, and the New York Stock Exchange.

Related Web Resources:
SEC could take action against Morgan Keegan, Bizjournals.com, July 15, 2009

Morgan Keegan Target For Possible SEC Suit, Memphis Daily News

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Posted In: Arbitration , Broker Fraud , Financial Firms , Morgan Keegan , Regions Financial Corporation

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