Securities Fraud Lawyers Gear Up For FINRA Arbitrations Over Failed Morgan Keegan Bonds
On the heels of several arbitration awards by Financial Industry Regulatory Authority (FINRA) panels, more investors who lost money in a group of Regions Morgan Keegan bond funds are prepping for legal action. The common denominator in their claims: Memphis-based Regions Morgan Keegan (RMK) and its managers allegedly hid the credit risks of various RMK bond funds. It wasn’t until after the funds plummeted in value that the brokerage firm finally came clean with investors.
Some of the RMK funds at the center of investors’ claims have seen their value fall by more than 90% because of ties to high risk and toxic collateral debt obligations (CDOs). Ultimately, investors suffered losses of more than $2 billion.
At issue is the alleged deception displayed by Regions Morgan Keegan and its management. According to investor complaints, Regions Morgan Keegan marketed and sold the bond funds as “relatively conservative” investments. Investors never knew about the hidden risks of the funds or the fact that mortgage-backed securities and collateralized debt obligations comprised more than 50% of each fund’s portfolio.
So far, FINRA has returned awards totaling more than $600,000 for investor claims over losses suffered in the RMK bond funds. The most recent awards were decided in March 2009 by FINRA arbitration panels in Indiana and Alabama.
Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.
