Morgan Keegan Settles Regulatory Issues with SEC, FINRA, & State Regulators Regarding Former Fund Management Business; Region...
June 22 2011 - 12:30PM
Business Wire
Regions Financial Corp. (NYSE:RF) announced today that its
brokerage and investment banking subsidiary, Morgan Keegan &
Company, Inc., and its asset management subsidiary, Morgan Asset
Management, have agreed to a settlement of previously disclosed
regulatory matters with the Securities and Exchange Commission
(SEC), the Financial Industry Regulatory Authority (FINRA), and a
group of state securities regulators with respect to issues
concerning certain mutual funds and closed-end funds (the RMK
Funds), a business that Morgan Asset Management divested in
2008.
As part of the settlement, Morgan Keegan and Morgan Asset
Management agreed to pay $210 million, of which $200 million will
be placed into two Fair Funds for the benefit of investors in the
RMK Funds in any state. The full amount of the settlement was
previously accrued.
Regions also announced that with these regulatory matters
settled, and as part of its ongoing capital planning process, it
has retained Goldman, Sachs & Co. to explore potential
strategic alternatives for Morgan Keegan as Regions evaluates how
best to manage its capital to increase shareholder value. Morgan
Asset Management and Regions Morgan Keegan Trust are not included
in this review.
Regions President and CEO Grayson Hall said, “Morgan Keegan has
been a subsidiary of Regions since 2001 and is a leading brokerage
and investment banking firm based in the Southeast and a very
valuable franchise. However, the resolution of this legacy
regulatory matter gives Regions greater flexibility with respect to
the Morgan Keegan franchise and the ability to explore
opportunities that are consistent with our strategic and capital
planning initiatives.
“Regions is committed to continuing to provide a full range of
products and services seamlessly to its customers, including
through a continuing relationship with Morgan Keegan,” Hall
said.
John Carson, CEO of Morgan Keegan said, “Morgan Keegan is
excited by the opportunity to further develop the brand that we
have built over the last 40 years. Morgan Keegan’s core businesses
remain strong and, with this settlement behind us, we look forward
to continuing to serve our individual, institutional and investment
banking clients and to growing our business.”
Settlement details
- The $210 million payment consists of:
- $200 million paid into two Fair Funds,
one administered under instructions from the SEC, and another
administered under instructions from the states, with $100 million
to be paid into each of the two funds; and
- A penalty of up to $10 million to be
paid to those states that join in the settlement.
- The five states initially included in
the settlement are: Alabama, Kentucky, Mississippi, South Carolina,
and Tennessee. The $10 million state penalty will be shared among
any participating states.
- An Administrator will identify the
investors in the Funds who suffered losses, evaluate investor
claims and distribute the funds. The Fair Funds are available to
investors in every state without regard to whether their state is
participating in the settlement.
About Regions Financial Corporation
Regions Financial Corporation, with $132 billion in assets, is a
member of the S&P 500 Index and is one of the nation’s largest
full-service providers of consumer and commercial banking, trust,
securities brokerage, mortgage and insurance products and services.
Regions serves customers in 16 states across the South, Midwest and
Texas, and through its subsidiary, Regions Bank, operates
approximately 1,800 banking offices and 2,200 ATMs. Additional
information about Regions and its full line of products and
services can be found at www.regions.com.
About Morgan Keegan
Morgan Keegan & Company, Inc., a full-service brokerage and
investment banking firm, is the securities brokerage arm of Regions
Financial Corp. (NYSE: RF). Headquartered in Memphis, Tenn., Morgan
Keegan serves individual and institutional investors in over 300
offices in 20 states. Additional information about Morgan Keegan
can be found at www.morgankeegan.com.
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