Investigation, potential class action and multiple individual claims against Morgan Keegan and Regions Financial Corp for arbitration claims on behalf of numerous individuals who invested in Morgan Keegan Funds.
Investors have filed class action lawsuits as well as individual arbitrations against Regions Morgan Keegan. The suits allege that the Funds and defendants misrepresented or failed to disclose certain material facts related to investments in the Select Intermediate Bond Fund and the Select High Income Fund.
Investors who purchased or acquired shares of Regions Morgan Keegan Select Intermediate Bond Fund or Select High Income Fund from December 6, 2004 through October 3, 2007, may have a claim to recover for their losses.
The allegations are that the Funds misrepresented or failed to disclose material facts:
(i) the nature of the risk being assumed by an investment in the Funds;
(ii) the illiquidity of certain securities in which the Funds invested;
(iii) the extent to which the Funds' portfolios contained securities that were highly vulnerable to suddenly becoming unsalable at the prices at which they were being carried on the Funds' records;
(iv) the extent to which the Funds' portfolios were subject to fair value procedures;
(v) the extent to which the values of such securities, and, consequently, the net asset values of the Funds, were based on estimates of value and the uncertainty inherent in such estimated values; and
(vi) the concentration of investments in a single industry in excess of investment restrictions to which the Funds were subject.
The extraordinary losses in share value were allegedly caused by the Funds' heavy investment in relatively new and untested types of manufactured or structured fixed income securities and by the failure of the Funds to comply with required and disclosed procedures relating to the manner in which the Funds' assets were invested. These failures rendered the Funds extraordinarily vulnerable to changes in market conditions, far more vulnerable than other intermediate bond and high income funds affected by the same events and conditions in the subprime and other markets in 2007.
The Funds revealed, for the first time, on October 3, 2007 that, as of June 30, 2006, and June 30, 2007, the magnitude of the Funds' securities that were fair valued and were, therefore, illiquid securities. For Regions Morgan Keegan Select Intermediate Bond Fund, it was disclosed that 55.8% of its investment securities were fair valued at June 30, 2006, and 50.4% at June 30, 2007. For Select High Income Fund, it was disclosed that 49.5% of its investment securities were fair valued at June 30, 2006, and 59.7% at June 30, 2007.
Investors must decide whether to bring individual securities arbitration claims or join a class action against Morgan Keegan and Regions Financial to recover losses.
The relevant Morgan Keegan Funds are as follows: (RMH) RMK High Income Fund; (RHY) RMK Multi-Sector High Income Fund; (RMA) RMK Advantage Income Fund;� (RSF) RMK Strategic Income Fund; (RHICX) Regions MK Select High Income-C; (MKHIX) Regions MK Select High Income-A; (RHIIX) Regions MK Select High Income-I; (RIBCX) Regions MK Select Intermediate Bond Fund-C; (MKIBX) Regions MK Select Intermediate Bond Fund-A�; (RIBIX) Regions MK Select Intermediate Bond Fund-
Name (Stock Symbol)
Morgan Keegan & Company
Morgan Keegan & Company, a subsidiary of Regions Financial Corporation, is a regional investment firm offering full-service investment banking, securities brokerage, wealth and asset management.
Regions Financial Corp (RF)
Regions Financial Corporation is provides consumer and commercial banking, trust, securities brokerage, mortgage and insurance products and services.
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