INDIANAPOLIS, March 16, 2009 (GLOBE NEWSWIRE) -- An Indianapolis, Indiana, FINRA arbitration panel has awarded $18,000 to Jo L. Wright, a church secretary from Whitestown, Indiana, for losses suffered in Morgan Keegan & Co. bond funds.
"This is the first Indiana case to go to an arbitration hearing relating to Morgan Keegan bond funds," said Wright's attorney, Mark E. Maddox of Maddox Hargett & Caruso, P.C. in Indianapolis. Since her total losses were $11,000, we're gratified that the Arbitrator awarded her $18,000," said Maddox.
"Wright's arbitration award once again affirms our view that Morgan Keegan engaged in an outright scheme to defraud investors in the sale of its bond funds," adds Maddox.
Morgan Keegan is a division of Regions Financial Corp (RF), a regional brokerage firm with offices located throughout the United States.
Wright initially was referred to Memphis-based Morgan Keegan by her local Indiana Regions bank branch manager. At the time of the referral, Wright's money had been in a certificate of deposit and a savings account. According to the arbitration claim, she transferred her funds into the Morgan Keegan Select Intermediate Bond Fund based on the bank manager's and Morgan Keegan's recommendation that the fund was a safe, conservative investment.
Wright, who had little prior investing experience, says she never knew that the Morgan Keegan bond fund was heavily invested in volatile asset-backed securities, nor had she been given a prospectus on the fund. Ironically, her Morgan Keegan investment had the exact return as her federally-insured CD for the prior year, despite its concentration in speculative securities.
In the Summer of 2007, the Morgan Keegan Select Intermediate Bond Fund began to plummet in value, while losses for investors skyrocketed. Some of the RMK funds lost more than 80% in value, with investors losing $2 billion from March 31, 2007 to March 31, 2008. By comparison, similar bond funds posted positive returns or only modest losses during the same time period.
In March 2008, Wright filed an arbitration claim against Morgan Keegan, citing that the Morgan Keegan Select Intermediate Bond Fund was an unsuitable investment recommendation and that Morgan Keegan management breached their fiduciary duties.
"At the end of the day, the evidence is catching up with Morgan Keegan," says Maddox. "Investors in the Morgan Keegan funds have collectively lost billions of dollars because Morgan Keegan management did not make them aware of the fact that the funds were tied to risky asset-backed and subprime mortgage-related assets."
The Morgan Keegan bond funds at the center of hundreds of investor arbitrations include the following:
-- Regions Morgan Keegan Select High Income-A, (Sym: MKHIX)
-- Regions Morgan Keegan Select High Income-C, (Sym: RHICX)
-- Regions Morgan Keegan Select High Income-I, (Sym: RHIIX)
-- RMK High Income Fund, (Sym: RMH)
-- RMK Strategic Income Fund, (Sym: RSF)
-- Regions Morgan Keegan Select Intermediate Bond Fund-A,
(Sym: MKIBX)
-- Regions Morgan Keegan Select Intermediate Bond Fund-C,
(Sym: RIBCX)
-- Regions Morgan Keegan Select Intermediate Bond Fund-I,
(Sym: RIBIX)
-- RMK Multi-Sector High Income, (Sym: RHY)
-- RMK Advantage Income, (Sym: RMA)
The law firm of Maddox Hargett & Caruso, P.C. has joined an association of law firms in pursuing claims by investors who suffered losses in these Morgan Keegan bond funds and other subprime mortgage-related investments. The laws firms include: Aidikoff, Uhl & Bakhtiari of Beverly Hills, CA; Page Perry, LLC of Atlanta, GA; and David P. Meyer & Associates of Columbus, OH.
Additional information is available at www.subprimelosses.com or by contacting one of our attorneys.