Our firm continues to handle securities fraud claims on behalf of investors against Memphis-based brokerage Morgan Keegan (a subsidiary of Regions Bank) for losses sustained as a result of investments in certain bond funds that were aggressively promoted by the company. Specifically, our lawyers are handling claims involving the following funds: Select Intermediate Bond Fund; Select High Income Fund; RMK High Income Fund; RMK Strategic Income Fund; RMK Advantage Income Fund; and RMK Multi-Sector High Income Fund.
These claims are being arbitrated through the Financial Industry Regulatory Authority (FINRA), with early results showing a promising degree of success. For example, you may have heard last fall that a FINRA arbitration panel awarded $1.4 million to a former professional basketball player, Horace Grant, as compensation for losses he suffered as a result of investments in Regions Morgan Keegan bond funds. Also in 2009, a FINRA panel awarded $950,000 to a former Kansas City Chiefs football star, Jerome Woods, and awarded $100,000 to another former baseball star and broadcaster, Tim McCarver.
These funds were a proprietary product of Morgan Keegan, and could not be held in or transferred to accounts outside of Morgan Keegan or its affiliates. Morgan Keegan earned substantial fees based on the average daily assets of the funds, and received commissions for selling the funds. Thus, Morgan Keegan had a keen financial incentive to promote the fund to prospective investors, and also maintained an incentive to discourage its investors from selling their shares in the funds – even as the funds began to tank.
In soliciting investors, Morgan Keegan represented that the funds were safe, secure, and offered the opportunity for high income without high risk. In fact, these funds were heavily invested in risky collateralized debt obligations backed by subprime loans. The majority of the funds’ holdings were in these high-risk asset-backed securities, contrary to Morgan Keegan’s marketing materials and SEC filings. The manager of these funds for Morgan Keegan has admitted that he was “intoxicated” by the high-risk asset based securities.
Unfortunately, as we all now know, these investments were a “ticking time bomb.” When the funds began to lose value in early 2008, Morgan Keegan sought to reassure investors to “sit tight,” when in reality Morgan Keegan knew that the funds were imploding. Many investors lost a substantial portion of their life-savings due to the fraudulent mismanagement of these funds. For further information concerning the Morgan Keegan litigation contact Scarlette Tuley or Archie Grubb at 800-898-2034 or by email at Scarlette.Tuley@beasleyallen.com or Archie.Grubb@beasleyallen.com.
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.