Below is FINRA’s press release of the $200M restitution order the SEC and FINRA levied on Regions Morgan Keegan (RMK) related to bond funds it misrepresented to investors. Big for investors. We had blogged about this in April 2010 when the SEC charged Morgan Keegan & Company, Morgan Asset Management and two employees with fraudulently overstating the value of securities backed by subprime mortgages. These were the first federal government allegations related to the Regions Morgan Keegan bond 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. Big fight will be to get fines into evidence during the pending arbitrations.
Morgan Keegan Ordered to Pay $200 Million to Investors to Settle Allegations Regarding Sales of Bond Funds Sales Materials Made Exaggerated Claims and Failed to Disclose Risks; Supervisory System Failures
WASHINGTON – The Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC) and five state regulators from Alabama, Kentucky, Mississippi, South Carolina and Tennessee announced today that each has settled enforcement proceedings against Morgan Keegan & Company, Inc. Morgan Keegan will pay restitution of $200 million for customers who invested in seven affiliated bond funds, including the Regions Morgan Keegan Select Intermediate Bond Fund (Intermediate Fund). Morgan Keegan’s affiliate, Morgan Asset Management, managed the funds.