Regions Financial Corp.'s Morgan Keegan Loses Yet Another Arbitration Case Relating to Proprietary RMK High Yield Funds That Bought Toxic Waste Assets, Says Sonn & Erez PLC -- RF

| Source: Sonn & Erez PLC

FORT LAUDERDALE, Fla., June 4, 2009 (GLOBE NEWSWIRE) -- Regions Financial Corp.'s (NYSE:RF) Morgan Keegan unit was again hit with yet another arbitration award relating to the sale of its proprietary high yield bond mutual funds marketed under the RMK brand name. On June 4, a FINRA arbitration panel in Boca Raton, Florida, awarded $431,000 to Philip Richardson, on a claim of "negligence" on the part of Morgan Keegan, relating to the sale of the RMK Select High Yield Bond Fund (MKHIX), and the RMK Select Intermediate Bond Fund (MKIBX), according to Jeffrey Sonn, Esq., of Sonn & Erez PLC, who represented Phillip Richardson. It was alleged that Memphis-based Morgan Keegan broker James Burnett, supervised by branch manager Wiley Maiden, sold the RMK bond funds to Mr. Richardson without disclosing the substantial risks that the funds contained "toxic waste," AKA risky low-tier tranches of asset backed securities that lacked demand and liquidity. During the case, Mr. Burnett testified he thought the RMK Select High Yield Bond Fund and the RMK Select Intermediate Bond Funds were conservative high yield bond funds; in contrast, Morgan Keegan expert Steven Scales opined that the funds were "moderate" risk, while in the same trial, Morgan Keegan attorneys from the Maynard Cooper law firm argued that the funds had speculative risks that were allegedly disclosed to customers in the prospectus, according to Sonn. "We strongly believe that our evidence, and our expert, Dr. Craig McCann, clearly established that the RMK proprietary bond funds were highly speculative and risky because of the extensive use of very risky low-tiered tranches of asset backed securities, which bankers commonly call 'toxic waste'...I successfully argued that Morgan Keegan should have been honest with their customers and simply called these funds 'toxic waste funds,' because that's what they are, in my opinion," said Sonn. Sonn & Erez PLC is a nationally recognized law firm in securities arbitration and litigation, representing victims of securities fraud.

This latest award comes on the heels of other verdicts and settlements against Morgan Keegan obtained by Sonn & Erez involving the sale of RMK proprietary high yield bond funds, including an award of $285,000 to a Jackson, Mississippi, Vietnam Veteran (FINRA #08-574), and $75,000 to a doctor in Little Rock, Arkansas (FINRA #08-491), as well as two settlements that were obtained for clients either mid-trial or post-trial. Moreover, other recent arbitration verdicts against Morgan Keegan include a $950,000 for an NFL star (FINRA #07-357) and nearly $700,000 for a Regions bank president (#08-336). Morgan Keegan is the subject of numerous arbitration cases relating to over $2 billion of losses in RMK proprietary bond mutual funds managed by former Morgan Keegan employee James Kelsoe.

"By our count, Morgan Keegan has lost 18 out of the last 24 cases, including where they settled mid-trial or post-trial," said Jeff Sonn, Esq. of Sonn & Erez PLC, a firm representing many Morgan Keegan victims. "We have won verdicts or settlements in the last 5 out of 6 cases that we took to trial," said Sonn. "In my opinion, Morgan Keegan failed to educate their brokers about the speculative risks of these funds, but urged them to sell these proprietary Morgan Keegan funds as if they were low to moderate risk, and now Morgan Keegan won't own up to its own mistakes," said Sonn. "They continue to act, in my opinion, like the emperor who wears no clothes; they just don't get it," said Sonn.

"My view is that Morgan Keegan's advertising and sales practices did not properly disclose the huge risks that clients were taking with these RMK high yield bond funds, as they were portrayed as relatively safe or moderate risk, despite the fact that some 60-70% of these funds were stuffed with 'toxic waste,'" said Jeffrey Erez, Esq.

It was alleged in these arbitrations conducted by Sonn & Erez that Morgan Keegan helped to create and sell high yield bond mutual funds managed by former Morgan Keegan employee, James Kelsoe, that were allegedly stable high yield bond mutual funds but were in fact highly speculative due to investments in low-tiered asset backed securities, commonly called "toxic waste." Now there are hundreds of arbitration claims nationwide pending against Morgan Keegan, Reuters reported. Regions Morgan Keegan (RMK) bond mutual funds managed by James Kelsoe lost over $2 billion dollars in 2007 and 2008.

"In my opinion, arbitration panels are now almost routinely recognizing that the RMK proprietary bond mutual funds sold by Morgan Keegan were mismarketed," added Sonn.

The Morgan Keegan bond funds that are the subject 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)
 * RMK Strategic Income Fund (Sym RSF)
 * RMK High Income Fund (sym: RMH)

For more information on the awards, contact Jeffrey Sonn or Jeffrey Erez at Sonn and Erez PLC.

Sonn & Erez PLC
Jeffrey Sonn, Esq.
Jeffrey Erez, Esq.
500 East Broward Blvd. Suite 1600
Fort Lauderdale, FL 33394