Morgan Keegan Hit with Multiple Arbitration Awards
Morgan Keegan has lost six FINRA arbitrations in the last two months related to the Regions Morgan Keegan funds which lost significant value in 2008. One of the recent awards included punitive damages. Many law firms around the U.S., including our firm, have been retained by investors who lost money in the Regions Morgan Keegan funds.
The funds were run by Jim Kelsoe, the chief-fixed income investment officer of the Memphis-based brokerage's Morgan Asset Management. The seven mutual funds include four Regions Morgan Keegan closed-end funds: Advantage Income Fund, High Income Fund, Multi-Sector High Income Fund and Strategic Income Fund; and three open-end funds: Regions Morgan Keegan Select Short Term Bond Fund, Intermediate Bond Fund and High Income Fund.
Morgan Keegan represented the Regions Morgan Keegan funds as low-risk bond funds. They turned out to be highly concentrated in subprime mortgage-backed securities and collateralized debt obligations (CDO’s). The losses are astounding. For example, The Select High Income lost 75% through February 28, 2008 and the Select Intermediate Bond lost 84%.
The recent run of arbitration victories bodes well for other investors who are either awaiting their hearing dates or have not yet filed an arbitration.