According to a report in the Memphis Daily News, more than 300,000 investors lost over a billion dollars when the subprime mortgage meltdown drained the funds seemingly overnight. Morgan Keegan has been plagued with litigation and arbitration claims from investors throughout the country. The bulk of arbitration claims reviewed by the Financial Industry Regulatory Authority (FINRA) have gone in favor of the investors.

The settlement will include the Securities and Exchange Commission (SEC), FINRA and the states that participated in the civil fraud investigation into Morgan Keegan investment firm – Alabama, Kentucky, Mississippi, South Carolina and Tennessee. Funds will be distributed to investors who lost money after an administrator identifies and evaluates their claims. The funds will be available to investors in any state, not only the five who participated in the settlement.

On the heels of the settlement announcement, the head of Regions Financial Corp. announced the company would begin to look at options for its investment portfolio, which may include the sale of the Morgan Keegan investment arm.

SOURCE: Morgan Keegan Investment Fraud › Regions eyes Morgan Keegan sale as investment arm settles Fraud claims

Regions is struggling under a second quarter reported loss of $335 million, and some watching the industry felt the company would be unable to absorb more losses and legal fees related to the Morgan Keegan lawsuits. As a result of the litigation, which involves proprietary Regions Morgan Keegan investment funds, Morgan Keegan racked up $161 million in legal fees last year, a jump of 44 percent over the previous year. The lawsuits allege the Regions Morgan Keegan funds were presented to investors as low-risk, but were actually tied to the volatile mortgage lending market. When the bottom fell out of that sector, many investors lost substantial amounts, almost overnight.

However, Regions and Morgan Keegan have recently partnered on a new investment banking division that more closely ties the financial institution with the investment brokerage. It is believed that this new relationship is already proving profitable by allowing Regions to leverage existing relationships with investment banking clients, the Business Journal reports.

An administrative hearing to discuss allegations of fraud against Morgan Keegan & Co. has been set for Oct. 5 in Montgomery, Ala. 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. The six mutual funds lost approximately $2 billion in value from March 31, 2007 to March 31, 2008. 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.

SOURCE: Morgan Keegan Investment Fraud › Regions, Morgan Keegan relationship stronger despite legal woes

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.

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