Sonn & Erez, PLC Announces That Regions Financial Corp.'s Morgan Keegan Ordered to Pay Investors $1 Million Relating to RMK Bond
June 10 2010 - 7:44PM
Regions Financial Corp.'s (NYSE:RF) Morgan Keegan unit was ordered
by a FINRA arbitration panel to pay over $1 million dollars in yet
another verdict relating to the sale of Regions Morgan Keegan
("RMK") bond mutual funds. (FINRA Case No. 08-3677). A Financial
Regulatory Authority (FINRA) arbitration panel in Fort Lauderdale,
Florida awarded clients of Sonn & Erez PLC the sum of
$1,080,101.38. Sonn & Erez, PLC attorney Jeff Erez, Esq. said
the award represents 100% of the net losses in the RMK bond funds.
Morgan Keegan is the subject of numerous arbitration cases
relating to over $2 billion of losses in RMK proprietary bond
mutual funds managed by James Kelsoe, which funds were decimated
due to allegedly risky investments in lower tranches of asset
backed securities, commonly known as "toxic waste." The funds at
issue in hundreds of pending cases are:
- RMK High Income Fund B RMH (Now HIH)
- RMK Strategic Income Fund B RSF (Now HSA)
- RMK Multi-Sector High Income Fund B RHY (Now HMH)
- RMK Advantage Income Fund B RMA (Now HAV)
- RMK Select High Income
- RMK Select Intermediate Bond Fund
The arbitration panel in Fort Lauderdale specifically found that
the award against Morgan Keegan was on the basis of negligent
supervision, misrepresentation and unsuitability. Erez said he
argued during the case that "the Morgan Keegan funds were marketed
as typical high-yield funds, but in fact were really structured
finance funds that invested in very risky tranches." Erez also said
a Morgan Keegan email demonstrated that Morgan Keegan hid the risks
of its funds. Gary Stringer, a Morgan Keegan employee, wrote in a
May, 2007 email that "I'd bet that most of the people who hold that
fund have no idea what's [sic] it's actually invested in. I'm just
as sure that most of our FAs have no idea what's in that fund
either." Jeff Sonn, Esq., Erez's partner, said that "this
award provides clear support for our allegations that Morgan Keegan
deceptively marketed and sold Regions Morgan Keegan (RMK) branded
bond mutual funds as safe, low risk investments although the funds
in fact invested in very risky lower tiers of structured finance
which most bankers call toxic waste." The Securities and Exchange
Commission, the Financial Regulatory Authority, and four states,
Alabama, Mississippi, Kentucky and South Carolina have charged
Morgan Keegan in regulatory suits that Morgan Keegan misled
customers, violated sales practice rules, and misvalued the funds,
among a host of other allegations.
Sonn & Erez PLC represents numerous investors who have lost
their savings in the RMK bond funds, and has obtained several
favorable arbitration awards for its clients. Sonn & Erez PLC
also filed a class action suit against Morgan Keegan in April, 2010
in Tennessee regarding misrepresentation in the sale of the RMK
Closed End Bond Funds. Sonn & Erez PLC is a nationally leading
law firm that represents investors who are the victims of
investment fraud or negligence.
For more information on the award, please contact Jeffrey Erez
or Jeffrey Sonn.
CONTACT: Sonn & Erez, PLC
Jeffrey Erez, Esq.
Jeffrey Sonn, Esq.
954-763-4700
Regions Financial (NYSE:RF)
Historical Stock Chart
From Jun 2024 to Jul 2024
Regions Financial (NYSE:RF)
Historical Stock Chart
From Jul 2023 to Jul 2024