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› $150,000,000 verdict in personal injury case
A recent news release published on the Class Action Newsline reports Regions Morgan Keegan has suffered another defeat at the hands of a FINRA arbitration panel in Boca Raton, Fla., which awarded $431,000 to plaintiff Philip Richardson for his losses in RMK investment funds. This is the latest in a string of judgments against Regions Financial Corp.’s Memphis-based Morgan Keegan unit.
Regions Morgan Keegan has suffered it sixth straight loss in arbitration negotiations with investors who claim they lost substantial amounts of money when RMK misrepresented its bond funds. The suits claim RMK presented the bond funds as low-risk investments, when they actually were tied to the volatile mortgage bond market. When the subprime mortgage lending crisis reached a peak, many investors lost up to 80 percent of their money almost overnight.
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.
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.
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.
A combination of defaulted loans in the plunging housing market and unique woes with its Morgan Keegan & Co. investment arm caused shares of Regions Financial Corp. stock to plunge 73 percent in the past year, according to a report in The Birmingham News. The company is headquartered in Birmingham.
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