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

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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In February, the Indianapolis Business Journal reported one of its locally based companies, CountryMark Cooperative, was joining the lawsuit against Morgan Keegan, which it says fraudulently invested funds in high-risk mortgaged-based securities. CountryMark alleges misrepresentation of funds, saying Morgan Keegan presented its investment portfolio as low-risk.

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