Shareholder Class Action Filed Against Morgan Keegan & Company, Inc. and Related Companies by the Law Firm of Schiffrin Barroway
February 27 2008 - 6:28PM
PR Newswire (US)
RADNOR, Pa., Feb. 27 /PRNewswire/ -- The following statement was
issued today by the law firm of Schiffrin Barroway Topaz &
Kessler, LLP: Notice is hereby given that a class action lawsuit
was filed in the United States District Court for the Western
District of Tennessee against Morgan Keegan & Company, Inc.
("Morgan Keegan"), Morgan Keegan Asset Management, Inc., Regions
Financial Corporation and related companies and officers and
directors (collectively the "Company"). This action is filed on
behalf of all purchasers of shares of the following Funds: RMK
Advantage Income Fund (NYSE:RMA), RMK Strategic Income Fund
(NYSE:RSF) and RMK High Income Fund (NYSE:RMH) ("the Funds")
between December 6, 2004 and February 6, 2008 (the "Class Period").
If you wish to discuss this action or have any questions concerning
this notice or your rights or interests with respect to these
matters, please contact Schiffrin Barroway Topaz & Kessler, LLP
(Darren J. Check, Esq. or Richard A. Maniskas, Esq.) toll free at
1-888-299-7706 or 1-610-667-7706, or via e-mail at . The Complaint
charges the Company, the Funds and certain of its officers and
directors with violations of the Securities Act of 1933. Morgan
Keegan served as distribution agent and underwriter for the Funds'
shares during the Class Period, and also served as the Transfer and
Dividend Disbursing Agent. RMK Advantage Income Fund, RMK Strategic
Income Fund and RMK High Income Fund are closed-end management
investment companies that invest primarily in debt securities. More
specifically, the Complaint alleges that the Funds' Registration
Statements failed to disclose or indicate the following: (1) the
true nature and extent of the risk related to the concentrated
securities within the Funds; (2) the extent to which the Funds were
invested in illiquid securities; (3) that the Funds were invested
in risky, new investment structures in which data was difficult to
obtain; (4) that due to the Funds' illiquidity, the manager would
be forced to initially sell first the liquid, lower risk assets,
thereby penalizing holders of the Funds; (5) that the Funds were
heavily invested in illiquid and subprime structures, such as
collateralized debt obligations; (6) that the Funds were invested
in assets that were being valued subjectively under "fair
valuation" procedures; (7) that the Funds' Boards of Directors
created a conflict of interest by not discharging their
responsibilities with respect to "fair valuation" and passing said
responsibilities to the Funds' investment advisor whose
compensation was tied to the value of the Funds' assets; (8) that
the Funds did not employ sufficient "value-investing" strategies,
yet they were sold to the public as being committed to
"value-oriented" investing; (9) that although the Funds were said
to be independent and employ different investment strategies, they
were managed in a nearly identical fashion and employed nearly
identical strategies, resulting in increased risk; (10) that the
Funds were heavily invested in risky, non-conforming mortgages that
did not comply with FHLMC or FNMA standards; (11) that the Funds'
pre-2006 results were attributable to their concentration in
illiquid, subprime and untested investment structures; and (12)
that adequate internal and financial controls did not exist. Each
of the Funds, pursuant to an individual yet substantially similar
Registration Statement and Prospectus filed with the SEC were
initially offered for $15 per share. On December 6, 2004 the share
price for each of the Funds was as follows: RMA at $15.82 per
share, RSF at $16.60 per share and RMH at $18.20 per share. As a
result of various statements and news stories issued, the value of
the Funds' shares consistently declined. By February 6, 2008, each
of the Funds was trading far below the closing price on December 6,
2004. On February 6, 2008, RMA declined to $4.10 per share for a
cumulative loss of $11.72, or over 74% of the price on December 6,
2004. Similarly, RSF declined to $3.90 per share for a cumulative
loss of $12.70, or over 76% of the price on December 6, 2004.
Finally, RMH declined to $4.20 for a cumulative loss of $14, or
almost 77% of the price on December 6, 2004. As a result of
defendants' wrongful acts and omissions, and the precipitous
decline in the market value of the Funds' securities, Plaintiff and
other Class Members have suffered significant losses and damages.
Plaintiff seeks to recover damages on behalf of class members and
is represented by the law firm of Schiffrin Barroway Topaz &
Kessler which prosecutes class actions in both state and federal
courts throughout the country. Schiffrin Barroway Topaz &
Kessler is a driving force behind corporate governance reform, and
has recovered billions of dollars on behalf of institutional and
individual investors from the United States and around the world.
For more information about Schiffrin Barroway Topaz & Kessler
or to sign up to participate in this action online, please visit
http://www.sbtklaw.com/ If you are a member of the class described
above, you may, not later than April 7, 2008, move the Court to
serve as lead plaintiff of the class, if you so choose. A lead
plaintiff is a representative party that acts on behalf of other
class members in directing the litigation. In order to be appointed
lead plaintiff, the Court must determine that the class member's
claim is typical of the claims of other class members, and that the
class member will adequately represent the class. Your ability to
share in any recovery is not, however, affected by the decision
whether or not to serve as a lead plaintiff. Any member of the
purported class may move the court to serve as lead plaintiff
through counsel of their choice, or may choose to do nothing and
remain an absent class member. CONTACT: Schiffrin Barroway Topaz
& Kessler, LLP Darren J. Check, Esq. Richard A. Maniskas, Esq.
280 King of Prussia Road Radnor, PA 19087 1-888-299-7706 (toll
free) or 1-610-667-7706 Or by e-mail at DATASOURCE: Schiffrin
Barroway Topaz & Kessler, LLP CONTACT: Darren J. Check, Esq. or
Richard A. Maniskas, Esq., both of Schiffrin Barroway Topaz &
Kessler, LLP, +1-888-299-7706 (toll free) or +1-610-667-7706, Web
site: http://www.sbtklaw.com/
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