Regions Morgan Keegan Lawsuit
About The Morgan Keegan Lawsuit

WHO BROUGHT THIS CASE?

Investors who lost life savings in certain Morgan Keegan funds are asserting claims against Morgan Keegan and its affiliates.

WHERE IS THE CASE BEING LITIGATED?

The case is filed in federal court in the Western District of Tennessee before the Honorable Samuel H. Mays. 

WHAT ENTITIES ARE NAMED IN THE LAWSUIT?        

  1. Morgan Asset Management, Inc.
  2. Morgan Keegan & Company, Inc.
  3. MK Holding, Inc.
  4. Regions Financial Corporation (NYSE:RF)
  5. Regions Bank
  6. PricewaterhouseCoopers LLP, and
  7. Certain individuals, officers and directors associated with the above entities

WHICH INVESTORS ARE INVOLVED?

The case is brought on behalf of investors who purchased shares of the following Regions Morgan Keegan (RMK) funds:

  1. RMK Select Intermediate Bond Fund ("MKIBX")
  2. RMK Select High Income Fund ("RHIIX”) and
  3. RMK Short Term Bond Fund (“MSBIX”)

DOES THE RECENT $200 MILLION SETTLEMENT WITH THE SEC IMPACT THIS CASE?

Not directly.  That settlement resolves claims by the SEC, FINRA, and regulators from five states.  It does not resolve the claims of investors in our case or the potential class members who are similarly situated. 
But indirectly, the settlement is important in that the regulators asserted similar claims to those asserted by the investors in this securities class action.

Specifically, “FINRA found that from the beginning of Jan. 2006 to the end of Sept. 2007, Morgan Keegan marketed and sold the Intermediate Fund to investors using sales materials that contained exaggerated claims, failed to provide a sound basis for evaluating the facts regarding the fund, were not fair and balanced, and did not adequately disclose the impact of market conditions in 2007 that caused substantial losses to the value of the Intermediate Fund.” http://www.finra.org/Newsroom/NewsReleases/2011/P123798

TELL ME ABOUT THE REGULATORS’ SETTLEMENT:

On June 22, 2011, a settlement was announced between Morgan Keegan affiliates and state and federal regulators. 

The Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC) and five state regulators from Alabama, Kentucky, Mississippi, South Carolina and Tennessee settled enforcement proceedings against Morgan Keegan & Company, Inc.

Under the terms of the settlement, Morgan Keegan will pay restitution of $200 million for customers who invested in seven affiliated bond funds, including the Regions Morgan Keegan Select Intermediate Bond Fund (Intermediate Fund). Morgan Keegan's affiliate, Morgan Asset Management, managed the funds.

FINRA's settlement included findings that Morgan Keegan:

  1. failed to establish, maintain and enforce an adequate supervisory system, including written supervisory procedures reasonably designed to achieve compliance with NASD rules.
  2. Morgan Keegan's supervisory system and written procedures were not reasonably designed to ensure that its sales literature disclosed certain information as to risk and did not contain exaggerated claims.
  3.  As a result, Morgan Keegan failed to adequately describe the nature, holdings and certain risks of the Intermediate Fund.
  4. In addition, beginning in 2007 when the particular risks associated with the Intermediate Fund's holdings began to impact negatively the holdings in the fund, Morgan Keegan failed to take steps reasonably designed to revise its advertising materials to inform customers of the specific risks of investing in the fund under the current market conditions.

http://www.finra.org/Newsroom/NewsReleases/2011/P123798

WASN’T THERE A RECENT DECISION AGAINST INVESTORS?

Yes, A federal court in Georgia came down in favor of Morgan Keegan, concluding that the Securities and Exchange Commission didn't introduce evidence that the firm backed a company-wide policy that encouraged brokers to mislead investors,

http://www.macon.com/2011/06/30/1616232/federal-judge-rejects-sec-claims.html#ixzz1RLI0Bq1n

To learn more about this case, click here

The other related case that has been filed: