Morgan Keegan Tries To Get Recent FINRA Awards Dismissed
For more than a year, hundreds of investors have filed claims with the Financial Industry Regulatory Authority (FINRA) over massive losses they sustained in a group of Morgan Keegan mutual funds that invested in high-risk mortgage securities. In a growing number of those cases, FINRA panels have ruled in favor of investors. Apparently unwilling to live with that outcome, however, Morgan Keegan is now asking a state court to overturn the rulings.
Morgan Keegan filed its most recent motion to vacate - which means it is asking a judge to throw out the arbitration panel’s award decision - on July 22. In that case, Morgan Keegan wants the $220,000 award dismissed because it says the panel’s chairman, who previously sat on another arbitration panel that ruled against Morgan Keegan, should have been released from the panel.
Two other appeals were filed in May. On the first motion, which involves an award of more than $628,000 to two investors, Morgan Keegan accuses arbitrators of misconduct for not postponing a hearing during which the investors presented suitability claims. Morgan Keegan filed the second motion to vacate on grounds that the arbitration panel exceeded its authority in awarding more than $187,000 in damages, attorneys’ fees and costs, said Steven B. Caruso, the attorney for the investor, in an Aug. 4 article in the Wall Street Journal.
Morgan Keegan’s strategy to file the appeals is unusual. Arbitration awards typically are binding, and appeals are difficult to win. Ultimately, the plan could backfire altogether for the brokerage.
“The strategy - and its delays - come with a price tag, said Caruso in the Wall Street Journal. “Who pays for it? The shareholders of Regions Financial.”
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.
