Morgan Keegan Must Pay More Than $200,000 In Bond Fund Case
Investment firm Morgan Keegan must pay more than $200,000 to an investor after a state court denied a request by the broker to overturn a decision by a Financial Industry Regulatory Authority (FINRA) arbitration panel.
Judge Nicole Gordon Still affirmed a $220,000 award in favor of United Prison Ministries International and its claim against Morgan Keegan over a group of bond funds that suffered massive losses in 2007 and 2008.
Collectively, investors have lost $2 billion in six of the Morgan Keegan funds in question. The funds include Regions Morgan Keegan Select High Income, RMK High Income Fund, RMK Strategic Income Fund, Regions Morgan Keegan Select Intermediate Bond Fund, RMK Multi-Sector High Income and RMK Advantage Income Fund.
As reported June 10 by the Wall Street Journal, Morgan Keegan, a unit of Birmingham-based Regions Financial Corp. (RF), filed an appeal to overturn the initial award to United Prison Ministries in June 2009. At the time, the brokerage argued that the panel’s chairwoman, who previously sat on another FINRA arbitration panel that ruled against Morgan Keegan, should have been recused, according to court documents.
Judge Nicole Gordon Still, however, disagreed.
“The mere fact that she has served on arbitration panels of Morgan Keegan, and has ruled against Morgan Keegan in the past, is not enough to establish bias or prejudice,” the judge wrote in an opinion.
