Regions Morgan Keegan Lawsuit
Actions Against Morgan Keegan Follow Class Action Allegations Brought By Investors

SEC, FINRA, and State Agency Actions Against Morgan Keegan Follow Class Action Allegations Brought By Investors

Memphis-- Recently initiated actions by the Securities Exchange Commission (SEC), FINRA, and several state agencies against Memphis-based broker Morgan Keegan mirror claims that investors raised more than two years ago in their class action lawsuit. 

The class action case, In re Regions Morgan Keegan Open-End Mutual Fund Litigation, Civil Action No. 2:07-cv-02784-SHM-dkv, is pending in the Western District of Tennessee before Judge Samuel H. Mays.  The case was filed in December 2007 against Regions Financial Corporation, Morgan Asset Management, Morgan Keegan, PricewaterhouseCoopers, and related defendants, regarding a Regions Morgan Keegan series of open-end mutual funds.  The Funds are the Regions Morgan Keegan High Income Fund (MKHIX, RHICX, RHIIX), Regions Morgan Keegan Intermediate Bond Fund (MKIBX, RIBCX, RIBIX), and Regions Morgan Keegan Short Term Bond Fund (MSTBX, RSTCX, MSBIX). 

The class action alleges that the defendants violated federal securities laws through their heavy investment of the Funds’ assets in derivatives and other subprime mortgage-related securities—leaving investors with almost $1 billion in losses. 

The class action allegations are echoed in the recent complaints brought by the U. S. Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and four states, which charge the Morgan Keegan defendants with wrongdoing similar to that alleged in the investors’ class action complaint.  Jerome Broadhurst, one of the attorneys representing the investors in their class action, states: “The actions filed by the SEC, FINRA and state agencies lend further weight to the investors’ claims and show that regulators are now recognizing that things went terribly wrong with these Funds.” 

Currently, the investors are waiting for the federal court’s decision on motions filed by the Morgan Keegan defendants seeking to dismiss the class action.  A group of related investors have also filed a derivative case against the Regions Morgan Keegan defendants, alleging mismanagement of the Funds. That case is also pending a decision by the federal court in Memphis.

The investors in the class action and derivative case are represented by Apperson Crump PLC of Memphis, and Minneapolis-based firms Head, Seifert & Vander Weide, P.A., Lockridge Grindal Nauen P.L.L.P., and Zimmerman Reed P.L.L.P.