The Law Firms of Sonn | Erez, and Burke, Harvey and Frankowski Announces Morgan Keegan & Company, Inc. Ordered to Pay Investor $1.1 Million Relating to RMK Funds
02/23/2010
Regions Financial Corp.'s Morgan Keegan & Company, Inc. was ordered by a FINRA arbitration panel to pay over $1.1 million dollars in yet another verdict relating to the sale of Regions Morgan Keegan ("RMK") mutual funds. A Financial Regulatory Authority (FINRA) arbitration panel in Birmingham, Alabama awarded companies related to General Henry Cobb the sum of $1,137,377.88. The award represents 80% of the $1.4 million of net losses in the RMK 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.' Morgan Keegan was ordered to pay $2.5 million to another investor, also relating to RMK funds. It was alleged in the Cobb case that Morgan Keegan helped to create and sell high yield bond mutual funds managed by former Morgan Keegan employee, James Kelsoe, that were allegedly stable high yield bond mutual funds but were in fact highly speculative due to investments in low-tiered asset backed securities, commonly called 'toxic waste.' Now there are hundreds of arbitration claims nationwide pending against Morgan Keegan, Reuters reported. Regions Morgan Keegan (RMK) bond mutual funds managed by James Kelsoe lost over $2 billion dollars in 2007 and 2008. The Morgan Keegan bond funds that are the subject of hundreds of investor arbitrations include the following: 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.
Wall Street Journal Article: 2nd Update Morgan Keegan Racks Up Another Big Loss on Bond Fund
