FINRA is the money management industry’s regulatory organization, and is overseeing hundreds of arbitration complaints from investors.

Recently, Morgan Keegan made a surprising decision to appeal three of the arbitration judgments, which had been decided by FINRA in favor of the investors. Those cases are now tied up in further litigation. Other suits are still pending review.

SOURCE: Morgan Keegan Investment Fraud › FINRA awards $1.4 million to NBA star for Regions Morgan Keegan losses

Morgan Keegan is owned by Birmingham, Ala. based Regions Financial Corp. The regional brokerage has been beset by lawsuits since 2007, when investors suffered huge losses and alleged the investment brokerage had misrepresented several funds as “safe,” when they were in fact high-risk investments tied to the mortgage bond market.

Regions Morgan Keegan is asking the court to vacate three arbitration awards totaling just over $1 million. Morgan Keegan filed its motions to vacate in a Birmingham, Ala. court. Clients affected by this recent development include a ministry that distributes free Bibles and religious books to prisoners and their families.

The appeal will delay resolution for the affected clients whose lawsuits are now once again pending, and will also cost the shareholders of Regions Financial Corp., who are on the hook for legal fees and other costs of the delay. It is estimated the appeal could drag the case out for as long as another two years.

SOURCE: Morgan Keegan Investment Fraud › Morgan Keegan appeals hit Regions shareholders in the pocketbook

SOURCE: Morgan Keegan Investment Fraud › RMK losses still piling up in arbitration rulings

Regions Financial Corp.

According to the report, the drop is tied to more losses in arbitration cases related to its Morgan Keegan bond fund unit, which lost $2 billion in risky asset-backed securities. Investors are suing Regions Morgan Keegan, alleging the investments were misrepresented as “safe” funds, when they were in fact tied to the volatile mortgage lending industry. When the industry went bust, investors lost up to 80 percent of their savings, practically overnight.

So far, the Financial Industry Regulatory Authority (FINRA), which is overseeing arbitration of these claims, has sided with investors every time, awarding nearly $2 million in damages to date. Recent judgments include $285,000 to a Vietnam Veteran in Mississippi, and nearly $1 million to former NFL star Jerome Woods, Market Watch reports.

SOURCE: Morgan Keegan Investment Fraud › Regions stock drops in light of arbitration losses

This week, Morgan Keegan & Co., a subsidiary of Regions Financial Corp., was ordered to pay $950,000 to investor Jerome Woods, whose claim included allegations of fraud, negligence and a breach of fiduciary duty by Morgan Keegan. Woods  is a former NFL defensive back, playing for the Kansas City Chiefs from 1996-2005.

According to a report in the Investment News, Woods was involved in four RMK investment funds: The RMK High-Income Fund, the RMK Advantage Fund, the RMK Strategic Income Fund and the RMK Multi-Sector High Income Fund.

Arbitrators have awarded RMK investors more than $1.6 million to date.

SOURCE: Morgan Keegan Investment Fraud › Investors, 6 Morgan Keegan, 0

Regions Morgan Keegan is defending hundreds of arbitration lawsuits regarding the funds, which were backed by risky mortgage-related assets. Investors allege the funds were represented as low-risk securities, but when the mortgage crisis hit beginning in the middle of 2007, the funds suffered staggering and sudden losses. Some funds dropped between 62 and 82 percent almost overnight.

After Hyperion aquired the RMK funds, several of them were rebranded under the Helios name. Funds set for liquidation are Helios Select High Income (HIFAX), Helios Select Intermediate Bond (HSIBX) and Helios Select Short Term Bond (MSBIX).

Source: Morningstar Fund Times

SOURCE: Morgan Keegan Investment Fraud › Helios bond funds set for liquidation

Hundreds of investors lost significant amounts of money nearly overnight as a result of monies invested in mortgage-backed funds that collapsed in the subprime lending crisis. Lawsuits against Regions Morgan Keegan allege the funds were represented to investors as low-risk preferred stocks and corporate bonds, when in fact they were some of the most risky investments available.

According to the CNNMoney report, this is the fifth straight Financial Industry Regulatory Authority (FINRA) arbitration award against Morgan Keegan for these proprietary bond funds. Previous award have included $50,000 to an Alabama retiree who lost his savings, and $187,000 to compensate a farmer with losses of $100,000 in the funds.

The most recent verdict sets a precedent for remaining pending arbitration lawsuits against the company.

SOURCE: Morgan Keegan Investment Fraud › RMK investor awarded more than $250,000 to cover bad fund losses

The Memphis native best known for his Major League career with the St. Louis Cardinals wanted to work with his hometown brokerage firm when he selected Morgan Keegan – based in Memphis and owned as a subsidiary of Birmingham, Ala. based Regions Financial Corp. – for his investments, the News says. However, his funds were placed in high-risk funds, resulting in unusually fast and severe losses.

The troubled funds were shifted to Hyperion Brookfield Asset Management in the summer of 2008, and the company has rebranded the funds under the Helios name.

Although McCarver received much less than his reported losses, the News quotes him as being happy with the result of the case, saying, “Morgan Keegan was found liable. I am delighted.”

SOURCE: Morgan Keegan Investment Fraud › McCarver gets $100,000 in RMK claim

The Post says McCarver’s broker represented the investment funds as conservative, similar to CDs and bonds, but instead put his money in high-risk funds tied to the mortgage market. When other funds suffered losses topping out around 6 percent, McCarver’s fund dropped between 70 and 90 percent, the paper reports.

It is estimated that industry investor losses in the Regions Morgan Keegan (RMK) funds totaled approximately $2 billion last year.

The Post says McCarver, 67, was looking for safe investments that would be a cushion for his retirement and provide security for his children.

Ironically, McCarver was born in Memphis, Tenn., the home of Morgan Keegan & Co. He played professional baseball for the St. Louis Cardinals, and in 1964 his tiebreaking home run in the 10th inning won Game 5 of the World Series for the team. He would go on to celebrate two World Series championships during his career with the Cardinals. Later in his career, he played for the Phillies, Expos and Red Sox.

He retired from pro ball in 1979 and began his career as a sportscaster. He currently works on the FOX network’s MLB telecasts with partner Joe Buck.

A minor league baseball stadium in Memphis was named after him in 1978, but was replaced by a new downtown stadium in 2000.

SOURCE: Morgan Keegan Investment Fraud › Baseball hero, sportscaster McCarver lost funds to RMK investments

According to the filing, the claim is based on alleged misrepresentation and omission of material information in the identified Funds’ registration statements and prospectus releases with regard to the nature, and the extent of the Funds’ investments in collateralized debt obligations (CDSs), together with the resulting exposure to the sub prime mortgage market.

The claim alleges further damages stemming from alleged false and misleading statements issued by Morgan Keegan with regard to the Funds’ safety, and capacity for generating income.

SOURCE: Morgan Keegan Investment Fraud › $4 Million Claim

According to the report, Morgan Keegan directed the farmer-owned co-op toward a $10 million investment in mortgage-backed securities, including subprime.

CountryMark purchased the note on Aug. 10, 2007. Seven days later, ratings agencies downgraded the A+-rated investment to junk status and it remains in default.

CountryMark is suing Memphis-based Morgan Keegan, a division of Alabama-based Regions Financial Corp., to recover the purchase price, interest and attorney’s fees. In the suit, filed in U.S. District Court in Indianapolis, the company says Morgan Keegan failed to disclose the investment was substantially backed by subprime and midprime mortgages–a risky bet that ran counter to the group’s investment objective. Financial institutions nationwide have written off more than $100 billion such investments, and many more writedowns are expected.

“We have been let down by Morgan Keegan in so many ways,” Charlie Smith, CountryMark’s CEO, said in a statement.

A spokeswoman for Morgan Keegan says the company was merely a middleman in the transaction, selling a “Golden Key” security underwritten by Merrill Lynch.

“The commercial paper at issue in this suit had the highest available commercial paper rating ‘A-1+’ by Standard & Poor’s,” said Kathy Ridley, in an e-mailed statement. “Morgan Keegan acted only as a distributor in this transaction, buying the securities from Merrill Lynch, who was the underwriter, and then reselling them to CountryMark. Shortly after the sale this issue defaulted, a rare and unexpected occurrence with such a highly rated issue.”

CountryMark isn’t the only local company to feel stung by investment advice from Morgan Keegan. The Indiana Children’s Wish Fund, which grants wishes for terminally ill children, lost about $48,000 after a Morgan Keegan adviser suggested the group invest $223,000 in an intermediate-bond fund in June 2007.

The fund, which included mortgage-related securities, fell 22 percent before the Wish Fund yanked its investment. The Wish Fund eventually recovered its loss after filing an arbitration claim.

SOURCE: Morgan Keegan Investment Fraud › CountryMark Losses