Regions Morgan Keegan Securities Fraud Lawyers
The lawyers and attorneys at our firm are offering free case evaluations to victims of Regions Morgan Keegan securities fraud. Evidence is mounting that executives and officers at Regions Morgan Keegan deliberately misled investors when they promoted the Select Intermediate Bond Fund ("MKIBX") and the Select High Income Fund ("RHIIX").
Because of this deception, individual and institutions with investments in these funds lost millions as a result of the mortgage meltdown. If you or someone you know suffered losses as result of this deception, we urge you to contact one of our Regions Morgan Keegan securities fraud lawyers as soon as possible to protect your legal rights.
Since 2007, Morgan Asset Management, Inc., Morgan Keegan & Company, Inc., Regions Financial Corporation, MK Holding, Inc., Regions Financial Corporation, PricewaterhouseCoopers LLP, and certain individuals, officers and directors have been named in various class action and individual lawsuits. These lawsuits were filed by and on behalf of investors who purchased shares of the Regions Morgan Keegan Select Intermediate Bond Fund and Regions Morgan Keegan Select High Income Fund from December 6, 2004 through October 3, 2007. Our Regions Morgan Keegan securities fraud lawyers are offering case evaluations to individuals, companies and institutions who lost more than $100,000 as a result of their investments in these funds.
Many of the Regions Morgan Keegan lawsuits claim the firm violated federal and state securities laws and ignored investors' request for only safe, short-term corporate commercial paper investments. The lawsuits also claim that Regions Morgan Keegan executives did not tell investors that the majority of their assets were invested in sup-prime, illiquid and untested investment structures. The Regions Morgan Keegan securities fraud lawyers at our firm have uncovered a substantial amounts of evidence that indicates investors were intentionally misled about the risk associated with the Select Intermediate Bond Fund and the Select High Income Fund.
Regions Morgan Keegan Select Intermediate Bond Fund and Select High Income Fund
Many investors in Regions Morgan Keegan bond funds did not know that the investments were much riskier than they had been presented. Investors were not told that mortgage-backed securities and collateralized debt obligation (CDO) made up over 50 percent of each fund’s portfolio. While such investments pay interest like ordinary bonds, they carry a much higher risk because there is a chance that the mortgages backing them will not be paid off. Unfortunately, many investors did not realize just how risky their Regions Morgan Keegan bond fund investments really were until the mortgage market imploded in 2007.
Since 2007, investors in the Regions Morgan Keegan Select Intermediate Bond Fund and Select High Income Fund have lost a total of $2 million. As of November 23, 2007, Morningstar reported that the Select High Income Fund's net asset value was down almost 55 percent year-to-date; from December 31, 2006 until November 30, 2007, the Select High Income Fund's net asset value per share declined from $10.14 to $3.91 for a loss of $6.23 per share, or 61.4 percent. For the same period, Morningstar reported that the Select Intermediate Bond Fund's net asset value was down over 43 percent; the Select Intermediate Bond Fund's net asset value per share declined from $9.93 to $5.07 for a loss of $4.86 per share or 48.9 percent.
Our Regions Morgan Keegan securities fraud lawyers believe these losses were a direct result of the firm's false and misleading information about the bond funds' risk tolerance and asset allocation, as well as the lack of diversification. It also appears that Regions Morgan Keegan misrepresented and omitted material information in the bond funds' registration statements and prospectuses concerning the nature and extent of the their investments in CDOs and the funds' resulting exposure to the subprime mortgage market.
Report on Regions Morgan Keegan Securities Fraud
In October 2008, a report published by the Securities Litigation and Consulting Group, Inc, conclud ed that had Regions Morgan Keegan performed a rudimentary analysis on its holdings (which it had to claimed to have done), it would have easily determined that investors in the funds were being exposed to as much as 10 times the credit risk of the underlying, already risky, debt.
The report concludes that Regions Morgan Keegan did indeed mislead investors about the risks associated with its bond funds. According to its report, Regions Morgan Keegan misrepresented hundreds of millions of dollars of leveraged asset-backed securities as corporate bonds and preferred stocks. This made the funds seem more diversified and less risky than they actually were, the report said.
Other Regions Morgan Keegan Securities Fraud Investigations
The lawyers and attorneys at our firm are offering free case evaluations to victims of other securities fraud perpetrated by Regions Morgan Keegan. In addition to the problems with its Select Intermediate Bond Fund and Select High Income Fund, Regions Morgan Keegan has also been implicated in a number of other scandals. If you or someone you know suffered losses as result of any of these frauds, we urge you to contact one of our Regions Morgan Keegan securities fraud lawyers as soon as possible to protect your legal rights.
Morgan Keegan & Co. Late Trading Scandal
In February 2005, Morgan Keegan & Company reached a settlement with the SEC to pay $558,000, including a $100,000 fine, to settle charges over the late trading of mutual funds. Late trading is an illegal practice that involves entering trades in mutual fund shares at that day’s closing price, but after the market closed.
Late trading is illegal because it enables traders to take advantage of market moving information before other investors are made aware of it. A trader involved in late trading is able to purchase or redeem mutual fund shares at prices set before the market moving information was released. To facilitate this activity, trades are disguised to appear as though they had entered earlier in the day. Often client and even firm identities are also hidden.
Morgan Keegan Fined for Research Practices, Lost Emails
In 2004, the SEC fined Morgan Keegan $875,000 for failing to disclose that it had received payments for issuing research on certain companies. By law, firms are required to disclose when they are paid for such research. According to the SEC, from 1999 through 2002, Morgan Keegan and six other regional brokerages received payments from other investment firms in exchange for issuing research on companies for which the paying firms were underwriting sales of securities, in some cases initial public offerings.
Morgan Keegan's $875,000 fine, among the highest assessed to the seven firms by the SEC, also settled charges that the firm failed to preserve business-related e-mail records as required under the federal securities law.
Lawsuit Over Alleged Morgan Keegan Short Selling Scheme
In 2007, Morgan Keegan, along with several other investment banks and hedge funds, was sued in New Jersey by a Canadian insurance company over claims that they had engaged in short selling schemes that violated various state laws, including the New Jersey Racketeer Influenced and Corrupt Organizations Act (RICO). The insurer, Fairfax Financial Holdings Ltd., claimed that it was "severely harmed" by the short selling schemes.
According to the complaint, Morgan Keegan released a "highly negative" report intended to create "an immediate and dramatic" drop in Fairfax shares. The lawsuit singled out a Morgan Keegan analyst who "continued [a] relentless litany of negative reports in support of his clients' enormous short positions, re-broadcasting ... standard criticisms, inventing others and consistently attempting to neutralize the increasingly positive news out of Fairfax."
Morgan Keegan Auction Rate Securities Charges
In 2006, Morgan Keegan and 12 other firms agreed to pay a total of $13 million to settle charges with the SEC that they violated securities laws involving the sale of auction rate securities. The violations covered in the settlement occurred between January 2003 and June 2004. According to the SEC, because of the illegal practices Morgan Keegan and the other firms engaged in, some investors might have not been aware of the true liquidity and credit risks associated with certain securities. The illegal practices also caused Morgan Keegan and others to favor some customers over others.
Morgan Keegan Fined for Excessive Markups
In May 2003, a Morgan Keegan broker was fined by the National Association of Securities Dealers, Inc. (NASD) for charging excessive markups on securities. Generally, markups on securities should be below 5 percent unless exceptional circumstances exist. The NASD alleged that a former broker at Morgan Keegan & Co. charged too much on numerous bond sales, including bonds sold by St. James Parish, La., to raise money for solid-waste disposal. Markups charged some Morgan Keegan customers ranging from 4 percent to over 7 percent.
The NASD alleged that the bonds "were readily available in the marketplace, and (the broker) offered no special services justifying an increased markup." While the broker in question was fined and sanctioned by the NASD, Morgan Keegan was not.
Legal Help for Victims of Regions Morgan Keegan Securities Fraud
If you or someone you know sustained substantial losses as a result of investments placed with Regions Morgan Keegan, you may be entitled to compensation. Please fill out our online form, or call 1-800 LAW INFO (1-800-529-4636) to discuss your claim with one of our Regions Morgan Keegan securities fraud lawyers.