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Chuck Jaffe, a senior columnist for MarketWatch, put Regions Morgan Keegan on his 13th annual Lump of Coal Awards list, which points out those companies and individuals who he believes should be on Santa’s “naughty” list in the world of investment funds. The list was published today on SFGate, an online publication of the San Francisco Chronicle.
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.
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.
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.
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.
The Birmingham News reported this week that Regions Financial Corp. may cut its dividend to shareholders as a result of defaulting real estate loans and a series of lawsuits in relation to Morgan Keegan investment fraud. Morgan Keegan is a subsidiary of Regions, as a brokerage unit. The dividend reduction was predicted by Standard & Poor’s Corp.
Currently, the News reports, Regions’ 38-cent quarterly dividend yields around 11 percent. The paper said banks are reducing dividends across the industry, largely due to the crisis in the housing market, as losses from home loans continue to climb.
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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