Closed-end fund settlement announced in investors’ securities fraud lawsuit against Morgan Keegan and Regions Financial. Investors’ open-end fund case still pending.
Closed-End Fund Investors’ Settlement
Morgan Keegan & Company Inc. and Regions Financial Corporation have agreed to pay $62 million to settle a securities fraud class action brought by investors in four closed-end mutual funds. The settlement also contemplates a $6million payment to settle a related derivative case. Papers were filed on Friday, October 11, 2012, asking U.S. District Judge Samuel Mays Jr. in Memphis, to preliminarily approve the settlement and allow notice to go out to investors in those funds. After the closed end fund investors filed an amended complaint in February 2011, the defendants moved to dismiss on standing grounds. In March 2012 Judge Mays upheld all of the claims against the corporate defendants and some of the claims against the individual directors and officers. After that ruling, mediation efforts moved forward and a settlement was reached. For more information on the closed-end fund settlement, see www.rmkclosedendfundsettlement.com.
Outstanding Litigation: Open-End Fund Investors
A parallel case, on behalf of investors in open-end funds, is currently stayed, pending a ruling by the District Court. Investors’ losses in the open-end funds are alleged to be far higher than those in the closed-end funds. No discovery or settlement discussions are ongoing in that action, prior to the Court’s ruling on an outstanding motion. This case is brought on behalf of investors who purchased shares of three Regions Morgan Keegan (RMK) funds: RMK Select Intermediate Bond Fund (MKIBX), RMK Select High Income Fund (RHIIX) and RMK Short Term Bond Fund (MSBIX). Additional information on this litigation can be found at www.morgankeeganlawsuit.com.
Outstanding Litigation: ERISA
This case is on behalf of participants in or beneficiaries of the Regions Financial Corporation 401(k) Plan and the AmSouth Bancorporation Thrift Plan and the Morgan Keegan & Company Revised Profit Sharing and Retirement Plan (the “Plans”) whose accounts included investments in Regions Financial Corp. common stock. The plan participants have survived two motions to dismiss; a third motion to dismiss selected counts in the third amended complaint is pending before the Court.
$200 Million Settlement: Enforcement Proceedings
Settlements have also been reached resolving enforcement proceedings by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and state regulators from Mississippi, South Carolina, Kentucky, Tennessee, and Alabama. Consent orders in those settlements were entered into in June 2011. For more information on these settlements, see www.morgankeegansettlement.com.