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

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

Jaffe placed RMK in the category “Not knowing when to quit,” citing the investment company’s insistence on keeping funds tied to high-risk subprime mortgages active even after they suffered losses topping 80 percent. The columnist already had named RMK’s manager James Kelsoe as the Lump of Coal (Mis)Manager of 2007, when the funds were showing losses of 50 percent, and expresses incredulity that the funds remained in operation despite their plummeting value.

He names two of the funds specifically, RMK’s Select Intermediate Bond fund and Select High Income, which lost, respectively, 80 percent and 85 percent of their value in 2008.

RMK is among  six investors or funds named to the list this week. Jaffe will award more lumps next week, and name the (Mis)Manager of the Year for 2008.

SOURCE: Morgan Keegan Investment Fraud › Financial columnist fills RMK stocking with coal

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

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

Hyperion is working to reposition and revamp the funds, which faltered badly as a result of ties to subprime mortgage lending. It is estimated that investors, who were promised low-risk funds but were instead placed into high-risk securities, suffered losses up to 90 percent of the value of their funds when the mortgage lending crisis caused value of the funds to plummet.

According to the Commercial Appeal, the new fund managers are beginning by evaluating each portfolio individually, and trying to determine whether there is any chance the fund in question could rebound. Hyperion will then work to secure better investments for the funds, hoping to see an improvement when the overall economy improves.

Hyperion fund managers have cut dividends for all seven funds, while purchasing promising high-yield corporate bonds, with a goal of improving the long-term financial picture by developing capital growth, according to the Commercial Appeal.

SOURCE: Morgan Keegan Investment Fraud › New MK fund managers tight-lipped

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