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 Business Journal report, CSG has filed suit in Shelby County Circuit Court, naming as defendants Morgan Keegan, Morgan Asset Management, Regions Financial Corp., and James Kelsoe Jr., who was at one time manger of the funds held by CSG. The paper says the company is alleging such illegal activities as misrepresentation and suppression, fraudulent concealment, breach of fiduciary duty, intentional interference with business relationships and “negligent supervision and conspiracy” involving the Regions Morgan Keegan funds.

Regions Morgan Keegan has been under fire for mismanagement and misrepresentation of several of its investment funds since 2008, when clients began crying “foul” after taking significant losses in funds sold to them as “low risk.” According to the many lawsuits filed on behalf of RMK investors, the funds were presented to them as low risk but were actually tied to the volatile mortgage market. When the housing industry collapsed, the funds were significantly devalued, almost overnight.

Funds included in the CSG lawsuit include the Regions Morgan Keegan Select High Income Fund, the Regions Morgan Keegan Select Intermediate Bond Fund, RMK High Income Fund Inc., RMK Strategic Income Fund Inc., RMK Advantage Income Fund Inc. and the RMK Multi-Sector Fund Inc.

Arbitration of pending lawsuits against Regions Morgan Keegan is being handled by the Financial Industry Regulatory Authority (FINRA). According to the Business Journal, arbitration panels have heard 78 cases to date.

SOURCE: Morgan Keegan Investment Fraud › CSG files lawsuit against Morgan Keegan alleging investment fraud