The Reuter’s piece says that despite the pledge, Ritter “dismissed the idea” of unloading Morgan Keegan. The bank suffered when its investment arm, headquartered in Memphis, Tenn., was the target of numerous lawsuits claiming misrepresentation of funds. Thousands of investors sued Regions Morgan Keegan, claiming certain investment funds were represented as low risk, when they were in fact tied to the high-risk mortgage bond market. When the bottom fell out of the housing market, many investors – which include individuals as well as companies and organizations – lost the majority of their money almost overnight.

A similar report in the Wall Street Journal says Ritter is open to “finding a partner for brokerage subsidiary Morgan Keegan & Co.” The question was posed during the recent Goldman Sachs & Co. U.S. Financial Services Conference in New York. According to the WSJ, while Ritter emphasized that he still feels Morgan Keegan is of “strategic importance” to Regions, he also vowed to stay open to any possibilities, and suggested a joint-venture for the brokerage would be appealing.

Arbitration of pending lawsuits against Regions Morgan Keegan is being handled by the Financial Industry Regulatory Authority (FINRA), and most settlements to date have gone in favor of the Plaintiffs. There are many lawsuits still currently pending.

SOURCE: Morgan Keegan Investment Fraud › Regions Financial eyes ‘any and all’ options to raise capital

There are numerous lawsuits currently pending against Birmingham, Ala.-based Regions Financial Corp.’s Memphis-based Morgan Keegan unit. Lawsuits filed on behalf of investors allege the RMK investment funds were misrepresented as low-risk, high-yield funds, when in fact they were tied to the volatile mortgage lending industry. As a result, when that industry faltered, investors lost up to 80 percent or more of their investments, almost overnight.

Unlike some other market investors, those who invest in bond funds generally choose them because they are relatively safe investments – or they should be. The typical investor is someone who is building a fund for retirement, close to retirement, building a college fund, or an organization that has invested operating capital. These investors are looking for slow, steady growth without much risk.

According to the U.S. News report, FINRA statistics reveal that through August, the organization has received 4,991 new dispute-resolution cases to date this year, which is an increase of 65 percent over 2008. Also, 1,173 of this year’s cases involved mutual funds, compared to 935 that invoved common stocks. The three most common charges FINRA is seeing in these cases are breach of fiduciary duty, misrepresentation, and negligence.

And, investors are getting relief in the majority of arbitration settlements, according to the news report. FINRA reports that 42 percent of cases that went to arbitration in 2008 resulted in compensation for investors. However, when prearbitration settlements are taken into account, that number is even higher, with 72 percent of total cases resulting in a win for the investor.

SOURCE: Morgan Keegan Investment Fraud › FINRA statistics show uptick in bond fund lawsuits