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