New York Securities Lawyer Blog
Numerous FINRA arbitration awards have been rendered against Morgan Keegan & Company Inc. (“Morgan Keegan”) based upon Morgan Keegan’s alleged misrepresentations regarding mutual funds sold as stable high yield bond mutual funds, which were actually highly speculative and risky investments in low grade asset backed securities, commonly referred to as “toxic waste.” There are also numerous pending FINRA arbitrations against Morgan Keegan regarding various Morgan Keegan funds including, but not limited to, the Regions Morgan Keegan Select High Income-A, Regions Morgan Keegan Select High Income-C, Regions Morgan Keegan Select High Income-I, RMK High Income Fund, RMK Strategic Income Fund, Regions Morgan Keegan Select Intermediate Bond Fund-A, Regions Morgan Keegan Select Intermediate Bond Fund-C, Regions Morgan Keegan Select Intermediate Bond Fund-I, RMK Multi-Sector High Income, RMK Advantage Income, RMK Strategic Income Fund, RMK High Income Fund. Just recently, on August 2, 2012, FINRA issued an award against Morgan Keegan relating to the sale of Regions Morgan Keegan (“RMK”) mutual funds. Specifically, this arbitration related to the RMK High Income Fund, the RMK Strategic Income Fund, the RMK Advantage Income Fund and the RMK Multi-Sector High Income Fund. In the claimants’ amended statement of claim, claimants requested $100,000 in compensatory damages, punitive damages, interest, costs and attorneys’ fees based upon Morgan Keegan’s alleged breach of fiduciary duty, negligence, negligent supervision, fraud and breach of contract. The Arbitration Panel held that “[Morgan Keegan] is liable for breach of fiduciary duty, negligence, negligent supervision, fraud and breach of contract and shall pay claimants compensatory damages in the sum of $100,000 plus interest at the Florida legal rate.” The Arbitration Panel also awarded claimants $100,000 in punitive damages, costs in the amount of $32,735, and attorneys’ fees in an amount to be determined by a court of competent jurisdiction. When awarding punitive damages, the Arbitration Panel held, “Claimants established by clear and convincing evidence that [Morgan Keegan] was guilty of intentional misconduct or gross negligence in its communication to its broker and the Claimants of the true nature of the RMK investments, the risks associated therewith and its failure to supervise the Claimants’ accounts.” If you have suffered losses from an investment in any Morgan Keegan funds, or other investment products that were represented as low risk, such as Citigroup Global Market Inc.’s MAT Five LLC and MAT Three LLC, and/or the Aravali Fund LP, which was sold and marketed by Deutsche Bank Securities, please contact Lax & Neville LLP for a free consultation.