Beasley, Allen, Crow, Methvin, Portis & Miles, P.C.

According to a report in the Memphis Commercial Appeal today, seven former Regions Morgan Keegan investment funds have changed their names, and six have new trading symbols. The changes reflect the change in management from Regions Financial to Hyperion Brookfield Asset Management, which took over the troubled investment arm in July. Each fund name now starts with Helio, which is Hyperion’s brand name.

The Commercial Appeal quotes Marion Hayes, a spokesperson for Hyperion, as saying, “It’s not right for these funds to be named Regions Morgan Keegan funds when they’re managed by us.”

The change affects four closed-end funds and three open-end funds. Hyperion took over management of the Morgan Keegan investment arm from Regions after several funds suffered steep and sudden drops in value as a result of their connection to the subprime mortgage securities market.

Following is a list of the changes:

Former RMK funds:
Helios Advantage Income Fund: From RMA to HAV
Helios High Income Fund: From RMH to HIH
Helios Multi-Sector High Income Fund: From RHY to HMH
Helios Strategic Income Fund: From RSF to HSA

Former Regions-Morgan Keegan Select funds:
Helios Select High Income Fund: From MKHIX to HIFAX
Helios Select Intermediate Income Fund: From MKIBX to HSIBX
Helios Select Short Term Bond Fund: MSBIX, no change

Today The Birmingham (Ala.) News reported that Morgan Keegan & Co., the investment arm of Regions Financial Corp., has purchased an investment bank, Burke Capital Group, based in Atlanta. The sale price was not released. Regions Financial Corp. is based in Birmingham.

According to its company web site, Burke Capital Group is an independent investment banking firm that provides “superior corporate finance and mergers and acquisitions advisory services to financial institutions and middle market companies.” The company was founded in 1995. In 2006, the SNL Financial’s Bank M&A Scoreboard listed Burke at No. 1 among the Top Southeast regional financial advisers for the third quarter.

Regions Morgan Keegan has been staggering since late 2007 when it was revealed that a number of its investment funds that were presented as low-risk had actually been tied to the volatile subprime mortgage lending market. When the mortgage industry collapsed, investors found their portfolios devalued literally overnight, resulting in massive losses.

In August, Hyperion Brookfield, based in New York, NY, took over the management of three open-end funds and four closed-end funds that had been managed by Morgan Asset Managment, an arm of Morgan Keegan, which is based in Memphis. Morgan Asset Management is owned by Regions Financial Corp.

Chuck Jaffe, a senior columnist for MarketWatch, put Regions Morgan Keegan on his 13th annual Lump of Coal Awards list, which points out those companies and individuals who he believes should be on Santa’s “naughty” list in the world of investment funds. The list was published today on SFGate, an online publication of the San Francisco Chronicle.

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The New York Post reported an exclusive item on Sunday, saying former Major League Baseball catcher and current sports broadcaster Tim McCarver has entered an arbitration case against Morgan Keegan & Co. for losses totaling about $1 million.

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The Daily News, which covers Memphis, reported yesterday that class action cases against Regions Morgan Keegan (RMK) pending in U.S. District Court for the Western District of Tennessee may be consolidated under U.S. District Judge Hardy Mays. The paper reports Judge Mays issued a ruling Tuesday that answers some questions about the request, and which group or groups could be selected as lead plaintiff in that event.

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On Aug. 18, we reported that Regions Morgan Keegan had shifted management of its seven failed investment funds to Hyperion Brookfield Asset Management company. This week, a report in the Memphis Commercial Appeal said the new managers have begun reworking the funds, but in a conference call with investors would not make any guarantees about results.

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After seven Regions Morgan Keegan investment funds took a nose dive because of their ties to the subprime mortgage lending crisis, stockholders found themselves holding greatly devalued portfolios. Because the funds had been initially represented as low-risk, when in actuality they were tied to the volatile subprime lending market, stockholders are bringing suit against Regions Morgan Keegan for their losses. Now, the investment portfolios have a new manager, Hyperion Brookfield Asset Manager.

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A combination of defaulted loans in the plunging housing market and unique woes with its Morgan Keegan & Co. investment arm caused shares of Regions Financial Corp. stock to plunge 73 percent in the past year, according to a report in The Birmingham News. The company is headquartered in Birmingham.

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The Birmingham News reported this week that Regions Financial Corp. may cut its dividend to shareholders as a result of defaulting real estate loans and a series of lawsuits in relation to Morgan Keegan investment fraud. Morgan Keegan is a subsidiary of Regions, as a brokerage unit. The dividend reduction was predicted by Standard & Poor’s Corp.

Currently, the News reports, Regions’ 38-cent quarterly dividend yields around 11 percent. The paper said banks are reducing dividends across the industry, largely due to the crisis in the housing market, as losses from home loans continue to climb.

An arbitration claim against Morgan Keegan was filed May 22 with the office of the Financial Industry Regulatory Authority (FINRA) and their Office of Dispute Resolution on behalf of an investor who lost an astounding $4 million. The plaintiff alleges damages relating to the sale of unsuitable bond funds.

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