Close
Updated:

Morgan Keegan Loses Another Bond Fund Arbitration

Morgan Keegan, a division of Regions Financial Group, lost yet another FINRA arbitration related to its Bond Funds. The case is allegedly the first successful arbitration on behalf of an investor who was not direct customer of Morgan Keegan. According the law firm who won the arbitration, the elderly investor was awarded complete damages, including interest and fees.

Morgan Keegan has now lost many FINRA arbitrations in the last six months related to the Regions Morgan Keegan funds which lost significant value in 2008. 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 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%.

It will be interesting to see if Morgan Keegan attempts to resolve some of the over 100 pending arbitrations now that they are consistently getting hammered.

Contact Us