Sonn | Erez Attorneys File Arbitration Claims Against Morgan Keegan for Bond Fund Losses
February 21, 2008
FORT LAUDERDALE, Fla., Feb. 21, 2008 (PRIME NEWSWIRE) -- Sonn | Erez (http://www.sonnerez.com/) attorneys today announced that it has filed an arbitration action against Morgan Keegan & Company Inc. relating to the sales and management of its proprietary bond mutual funds. Sonn | Erez filed the arbitration case of Louis Velez vs. Morgan Keegan and Company Inc. (FINRA Case No.08-491) before the Financial Regulatory Authority. The suit for a Little Rock, Arkansas customer of Morgan Keegan alleges that the Morgan Keegan proprietary funds, known as RMK Advantage Income Fund, RMK MultiSector High Income Fund, RMK Strategic Income Fund, RMK High Income Fund, sustained horrific losses because of their "common strategy of investing in volatile, risky and illiquid investments such as collateralized debt obligations ('CDO')," the suit alleges. The suit also alleged that, "Morgan Keegan was also the administrator and distributor for the RMK funds and deceptively marketed the RMK bond funds as conservative bond investments. For example, in (a) September 30, 2006 Annual Report, Morgan Keegan stated that 'Bond funds tend to experience smaller fluctuations in value than stock funds.'" However, by September 20, 2007, Morgan Keegan revised its statements to read, "Investors in any bond fund should anticipate fluctuations in price, and removed its prior statement that stated that bond funds experience smaller fluctuations than stock funds. Morgan Keegan by its very own actions admits that its pre-September, 2007 disclosures were inaccurate and mislead investors and its own stockbrokers."
Class Actions have been filed against Morgan Keegan and its affiliated companies, but Sonn | Erez has decided to accept cases against Morgan Keegan in securities arbitration rather than in class actions. "We believe investors will fare better in arbitration than in a class action," said Jeff Sonn, Esq., of Sonn | Erez. The funds' losses are set forth below as of 12/31/2007:
Ticker
Bond Fund Y-T-D Return as of 12/31/07
RMH RMK High Income Fund -65.53%
RHY RMK Multi-Sector High Income Fund -65.09%
RMA RMK Advantage Income Fund -66.68%
RSF RMK Strategic Income Fund -66.92%
RHICX Regions MK Select High Income-C -59.95%
MKHIX Regions MK Select High Income-A -59.74%
RHIIX Regions MK Select High Income-I -59.64%
RIBCX Regions MK Select Intermediate Bond Fund-C -50.54%
MKIBX Regions MK Select Intermediate Bond Fund-A -50.30%
RIBIX Regions MK Select Intermediate Bond Fund-I -50.07%
If you lost $50,000 or more in the Morgan Keegan Funds, please contact Jeffrey R. Sonn, Esq. or Jeff Erez, Esq. of Sonn | Erez, PLC, at 866-372-8311, to explore your legal rights. You may also visit us on the web at http://www.sonnerez.com/, Sonn | Erez is "AV" rated by Martindale Hubbel, the highest rating from this preeminent attorney rating service; Sonn | Erez is an experienced and nationally recognized securities litigation law firm, continues its representation of investors throughout the world in securities arbitration and litigation matters against major Wall Street brokerage firms.
CONTACT: Sonn | Erez, PLC Jeffrey R. Sonn Jeff Erez, Esq. 866-372-8311 http://www.sonnerez.com/
