BOCA RATON, Fla., Feb. 5, 2008 (PRIME NEWSWIRE) -- The Securities Law Firm of Klayman & Toskes, P.A. ("K&T") (http://www.nasd-law.com) announced today that it filed a lawsuit against Morgan Keegan & Co. and Regions Financial Corp. (NYSE:RF) with the Financial Industry Regulatory Authority ("FINRA"), on behalf of a Charitable Remainder Trust ("CRT"). A CRT is a trust designed to disburse income to the beneficiary of the trust for a specified period of time. Upon the passing of the beneficiary, the principal of the CRT is to be disbursed to the designated charity. The CRT in the arbitration filed by K&T purchased Morgan Keegan Bond Funds to preserve the principal of the trust, and to provide income for the beneficiary. Morgan Keegan represented these Bond Funds to be diversified, "safe", income generating securities. However, the Bond Funds turned out to be concentrated in mortgage related securities, and they declined over 60% during the year 2007. As a result, the CRT has lost the majority of the principal that was designated for the charity.
Among other allegations, the lawsuit alleges that the CRT lost money in the RMK Multi-Sector High Income Fund (NYSE:RHY), RMK High Income Fund (NYSE:RMH), and the RMK Strategic Income Fund (NYSE:RSF) as a direct result of Morgan Keegan's false and misleading information about the Funds' risk tolerance and asset allocation, as well as the lack of diversification. Further, the claim alleges that Morgan Keegan misrepresented and omitted material information in the Funds' registration statements and prospectuses concerning the nature and extent of the Funds' investments in collateralized debt obligations ("CDOs"), and the funds' resulting exposure to the subprime mortgage market.
While class action lawsuits have been filed regarding the Morgan Keegan Bond Funds, Klayman & Toskes encourages investors who lost $50,000 or more in the Funds to consider whether they too should attempt to recover their losses through the filing of an individual securities arbitration claim, rather than waiting for class action litigation to take its course. By participating in a class action lawsuit, an investor will most likely recover only pennies on the dollar. However, if you lost $50,000 or more in the Morgan Keegan Bond Funds, it may be more beneficial for you to file an individual securities arbitration claim. In 2003, K&T conducted a study of securities arbitration versus class action. The study concluded that investors who file a securities arbitration claim obtain an overall higher rate of recovery as opposed to participating in a class action lawsuit. To view the full results of the comparison, please visit our web-site: http://www.nasd-law.com/classvr.pdf
The securities arbitration lawsuits being filed by Klayman & Toskes on behalf of investors involve losses in the following Morgan Keegan Bond Funds:
Y-T-D Return
Ticker Bond Fund as of 12/31/07
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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 Bond Funds, please contact Lawrence L. Klayman, Esquire or Steven D. Toskes, Esquire of Klayman & Toskes, P.A., at 888-997-9956, to explore your legal options. You may also visit us on the web at http://www.nasd-law.com. Klayman & Toskes, 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.
More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca.