The administrative action is the culmination of a multi-state investigation involving six mutual funds sold by Morgan Keegan broker dealers to approximately 13,000 customers. Those six mutual funds lost approximately $2 billion in value from March 31, 2007 to March 31, 2008.

The states of Mississippi, Alabama, Kentucky and South Carolina, along with the Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) announced administrative actions against Morgan Keegan, which is based in Memphis, Tenn., on April 7.

The Joint Administrative hearing includes Mississippi, Alabama, South Carolina and Kentucky, and will be held at the offices of the Alabama Securities Commission in Montgomery, Ala., on Tuesday, Oct. 5, 2010 beginning at 9 a.m. CST. The hearing was requested by attorneys representing Morgan Keegan, Morgan Asset Management, James C. Kelsoe, Jr., Brian B. Sullivan, Gary S. Stringer and Michele F. Wood as Respondents.

SOURCE: Morgan Keegan Investment Fraud › Morgan Keegan hearing set for October in Montgomery, Ala.

The Reuter’s piece says that despite the pledge, Ritter “dismissed the idea” of unloading Morgan Keegan. The bank suffered when its investment arm, headquartered in Memphis, Tenn., was the target of numerous lawsuits claiming misrepresentation of funds. Thousands of investors sued Regions Morgan Keegan, claiming certain investment funds were represented as low risk, when they were in fact tied to the high-risk mortgage bond market. When the bottom fell out of the housing market, many investors – which include individuals as well as companies and organizations – lost the majority of their money almost overnight.

A similar report in the Wall Street Journal says Ritter is open to “finding a partner for brokerage subsidiary Morgan Keegan & Co.” The question was posed during the recent Goldman Sachs & Co. U.S. Financial Services Conference in New York. According to the WSJ, while Ritter emphasized that he still feels Morgan Keegan is of “strategic importance” to Regions, he also vowed to stay open to any possibilities, and suggested a joint-venture for the brokerage would be appealing.

Arbitration of pending lawsuits against Regions Morgan Keegan is being handled by the Financial Industry Regulatory Authority (FINRA), and most settlements to date have gone in favor of the Plaintiffs. There are many lawsuits still currently pending.

SOURCE: Morgan Keegan Investment Fraud › Regions Financial eyes ‘any and all’ options to raise capital

There are numerous lawsuits currently pending against Birmingham, Ala.-based Regions Financial Corp.’s Memphis-based Morgan Keegan unit. Lawsuits filed on behalf of investors allege the RMK investment funds were misrepresented as low-risk, high-yield funds, when in fact they were tied to the volatile mortgage lending industry. As a result, when that industry faltered, investors lost up to 80 percent or more of their investments, almost overnight.

Unlike some other market investors, those who invest in bond funds generally choose them because they are relatively safe investments – or they should be. The typical investor is someone who is building a fund for retirement, close to retirement, building a college fund, or an organization that has invested operating capital. These investors are looking for slow, steady growth without much risk.

According to the U.S. News report, FINRA statistics reveal that through August, the organization has received 4,991 new dispute-resolution cases to date this year, which is an increase of 65 percent over 2008. Also, 1,173 of this year’s cases involved mutual funds, compared to 935 that invoved common stocks. The three most common charges FINRA is seeing in these cases are breach of fiduciary duty, misrepresentation, and negligence.

And, investors are getting relief in the majority of arbitration settlements, according to the news report. FINRA reports that 42 percent of cases that went to arbitration in 2008 resulted in compensation for investors. However, when prearbitration settlements are taken into account, that number is even higher, with 72 percent of total cases resulting in a win for the investor.

SOURCE: Morgan Keegan Investment Fraud › FINRA statistics show uptick in bond fund lawsuits

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

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

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 deal is pending approval by Regions shareholders, but if approved will remove the financial company from the mutual funds business entirely, according to the Journal.

This news follows on the heels of other efforts by Regions to divest itself of investment funds following a series of lawsuits filed last year by investors who claimed RMK investment funds had been misrepresented. The suits allege investment portfolios were presented as low risk, when in actuality they were tied to the high-risk subprime mortgage market. Investors suffered steep and immediate losses as a result.

Just a few months ago, Regions transferred management of a group of its bond funds from Morgan Keegan to Hyperion-Brookfield Asset Managment, Inc., and most of those funds changed to the brand name Helio to reflect the new brand name. Six of those funds also received new trading symbols.

According to the Birmingham Business Journal, the transaction with Pioneer involves a separate group of funds than those now managed by Hyperion.

Bloomberg recently reported that Regions Financial Corp. reported a 23-year-low in New York trading after reporting a record $6.24 billion loss. According to the news report, the losses are blamed largely on bad debt resulting from the collapse in the mortgage-lending industry, with a record number of loan defaults and foreclosures.

SOURCE: Morgan Keegan Investment Fraud › Regions selling off RMK Select Funds

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.

SOURCE: Morgan Keegan Investment Fraud › Morgan Keegan buys investment bank

The RMK litigation involves investment funds managed by a branch of Morgan Keegan & Co., which is based in Memphis. Regions Financial Corp., headquartered in Birmingham, owns Morgan Asset Management, an arm of Morgan Keegan.

According to suits filed on behalf of plaintiffs in these cases, seven RMK investment funds took a nose dive because of their ties to the subprime mortgage lending crisis, and 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.

According to the Daily News story, Judge Mays considered five putative class actions that were filed in the local federal court, and two motions to consolidate. The paper reports the judge’s ruling states actions that were included in the motions for consolidation “share both factual and legal issues, arise from the same facts, raise similar legal claims and name substantially the same defendants.”

Judge Mays has not yet named a lead plaintiff in the consolidation. He ruled out one group that had petitioned for the spot as being too large, with 19 individual and institutional investors, according to the Daily Times.

There are many individual claims still pending across the country in this matter.

SOURCE: Morgan Keegan Investment Fraud › RMK lawsuits may be consolidated in Tennessee

According to a report in the Memphis Commercial Appeal, 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., based in Birmingham, Ala.

The Commercial Appeal reports that Hyperion investors will reposition the funds and revamp the portfolios in an effort to revive them. New investments will focus on investment grade corporates and high-yield securities, according to Dana Erikson, who is now portfolio manager, the Appeal says.

Hyperion Brookfield has scheduled a conference call for shareholders on Sept. 4 to discuss specific plans of the portfolio restructuring.

SOURCE: Morgan Keegan Investment Fraud › MK funds get new asset manager

The housing market’s decline is affecting the bottom line at banks nationwide, but the situation has dealt Regions a double-whammy in the shape of fallout from its Morgan Keegan mutual fund investments. The financial giant is facing a number of lawsuits with investors saying they were promised low-risk funds but were instead invested in funds based on risky subprime mortgages. Investors are claiming losses of up to 53 percent.

Now, financial analysts are advising Regions to conserve capital by eliminating dividends that would normally be paid to stockholders, cutting off a source of income for thousands of stockholders, The News reports.

The situation is made even gloomier because stockholders expected 2008 to be a banner year as the result of the November 2006 merger of Regions with AmSouth. The merger combined two of the largest banks in the state and gave Regions Financial Corp. a 16-state reach.

Although the bank is considered well-capitalized and financially sound, Regions’ loan loss fund has grown to $1.4 billion, which is 1.49 percent of net loans, The News reports. This is an increase from 1.45 percent in 2007, which the News says analysts consider a significant jump.

SOURCE: Morgan Keegan Investment Fraud › Regions hit by double whammy

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.

SOURCE: Morgan Keegan Investment Fraud › Predicted Regions dividend drop