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

The Memphis Daily News recently reported that Hyperion Brookfield Asset Management, which in July took over administration of seven Regions Morgan Keegan funds under fire for misrepresentation, will liquidate one of the funds, pending shareholder approval. The fund in question is the Regions Morgan Keegan Select Short Term Bond Fund.

Hyperion took over management of the Morgan Keegan investment arm of Regions after several funds suffered steep and sudden drops in value as a result of their connection to the subprime mortgage securities market.

On Dec. 30, the Daily News announced that Hyperion had changed the names of seven former RMK investment funds, now calling them Helios funds, reflecting the change in management, and of course removing the stigma of the RMK investment debacle.

Sales of the Select Short Term Bond Fund shares to new investors will stop effective Jan. 23.

According to a report in the Memphis Commercial Appeal today, seven former Regions Morgan Keegan investment funds have changed their names, and six have new trading symbols. The changes reflect the change in management from Regions Financial to Hyperion Brookfield Asset Management, which took over the troubled investment arm in July. Each fund name now starts with Helio, which is Hyperion’s brand name.

The Commercial Appeal quotes Marion Hayes, a spokesperson for Hyperion, as saying, “It’s not right for these funds to be named Regions Morgan Keegan funds when they’re managed by us.”

The change affects four closed-end funds and three open-end funds. Hyperion took over management of the Morgan Keegan investment arm from Regions after several funds suffered steep and sudden drops in value as a result of their connection to the subprime mortgage securities market.

Following is a list of the changes:

Former RMK funds:
Helios Advantage Income Fund: From RMA to HAV
Helios High Income Fund: From RMH to HIH
Helios Multi-Sector High Income Fund: From RHY to HMH
Helios Strategic Income Fund: From RSF to HSA

Former Regions-Morgan Keegan Select funds:
Helios Select High Income Fund: From MKHIX to HIFAX
Helios Select Intermediate Income Fund: From MKIBX to HSIBX
Helios Select Short Term Bond Fund: MSBIX, no change

Today The Birmingham (Ala.) News reported that Morgan Keegan & Co., the investment arm of Regions Financial Corp., has purchased an investment bank, Burke Capital Group, based in Atlanta. The sale price was not released. Regions Financial Corp. is based in Birmingham.

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.

The New York Post reported an exclusive item on Sunday, saying former Major League Baseball catcher and current sports broadcaster Tim McCarver has entered an arbitration case against Morgan Keegan & Co. for losses totaling about $1 million.

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The Daily News, which covers Memphis, reported yesterday that class action cases against Regions Morgan Keegan (RMK) pending in U.S. District Court for the Western District of Tennessee may be consolidated under U.S. District Judge Hardy Mays. The paper reports Judge Mays issued a ruling Tuesday that answers some questions about the request, and which group or groups could be selected as lead plaintiff in that event.

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On Aug. 18, we reported that Regions Morgan Keegan had shifted management of its seven failed investment funds to Hyperion Brookfield Asset Management company. This week, a report in the Memphis Commercial Appeal said the new managers have begun reworking the funds, but in a conference call with investors would not make any guarantees about results.

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After seven Regions Morgan Keegan investment funds took a nose dive because of their ties to the subprime mortgage lending crisis, 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. Now, the investment portfolios have a new manager, Hyperion Brookfield Asset Manager.

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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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