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Consumer Fraud 1428 articles

RMK lawsuits may be consolidated in Tennessee

The Daily News, which covers Memphis, reported yesterday that class action cases against Regions Morgan Keegan (RMK) pending in U.S. District Court for the Western District of Tennessee may be consolidated under U.S. District Judge Hardy Mays. The paper reports Judge Mays issued a ruling Tuesday that answers some questions about the request, and which group or groups could be selected as lead plaintiff in that event. The RMK litigation involves investment funds managed by a branch of Morgan Keegan & Co., which is based in Memphis. Regions Financial Corp., headquartered in Birmingham, owns Morgan Asset Management, an arm of ... Read More

New MK fund managers tight-lipped

On Aug. 18, we reported that Regions Morgan Keegan had shifted management of its seven failed investment funds to Hyperion Brookfield Asset Management company. This week, a report in the Memphis Commercial Appeal said the new managers have begun reworking the funds, but in a conference call with investors would not make any guarantees about results. Hyperion is working to reposition and revamp the funds, which faltered badly as a result of ties to subprime mortgage lending. It is estimated that investors, who were promised low-risk funds but were instead placed into high-risk securities, suffered losses up to 90 percent ... Read More

MK funds get new asset manager

After seven Regions Morgan Keegan investment funds took a nose dive because of their ties to the subprime mortgage lending crisis, stockholders found themselves holding greatly devalued portfolios. Because the funds had been initially represented as low-risk, when in actuality they were tied to the volatile subprime lending market, stockholders are bringing suit against Regions Morgan Keegan for their losses. Now, the investment portfolios have a new manager, Hyperion Brookfield Asset Manager. According to a report in the Memphis Commercial Appeal, Hyperion Brookfield, based in New York, NY, took over the management of three open-end funds and four closed-end funds ... Read More

Regions hit by double whammy

A combination of defaulted loans in the plunging housing market and unique woes with its Morgan Keegan & Co. investment arm caused shares of Regions Financial Corp. stock to plunge 73 percent in the past year, according to a report in The Birmingham News. The company is headquartered in Birmingham. The housing market’s decline is affecting the bottom line at banks nationwide, but the situation has dealt Regions a double-whammy in the shape of fallout from its Morgan Keegan mutual fund investments. The financial giant is facing a number of lawsuits with investors saying they were promised low-risk funds but ... Read More

Predicted Regions dividend drop

The Birmingham News reported this week that Regions Financial Corp. may cut its dividend to shareholders as a result of defaulting real estate loans and a series of lawsuits in relation to Morgan Keegan investment fraud. Morgan Keegan is a subsidiary of Regions, as a brokerage unit. The dividend reduction was predicted by Standard & Poor’s Corp. Currently, the News reports, Regions’ 38-cent quarterly dividend yields around 11 percent. The paper said banks are reducing dividends across the industry, largely due to the crisis in the housing market, as losses from home loans continue to climb. ... Read More

$4 Million Claim

An arbitration claim against Morgan Keegan was filed May 22 with the office of the Financial Industry Regulatory Authority (FINRA) and their Office of Dispute Resolution on behalf of an investor who lost an astounding $4 million. The plaintiff alleges damages relating to the sale of unsuitable bond funds. According to the filing, the claim is based on alleged misrepresentation and omission of material information in the identified Funds’ registration statements and prospectus releases with regard to the nature, and the extent of the Funds’ investments in collateralized debt obligations (CDSs), together with the resulting exposure to the sub prime ... Read More

CountryMark Losses

In February, the Indianapolis Business Journal reported one of its locally based companies, CountryMark Cooperative, was joining the lawsuit against Morgan Keegan, which it says fraudulently invested funds in high-risk mortgaged-based securities. CountryMark alleges misrepresentation of funds, saying Morgan Keegan presented its investment portfolio as low-risk. According to the report, Morgan Keegan directed the farmer-owned co-op toward a $10 million investment in mortgage-backed securities, including subprime. CountryMark purchased the note on Aug. 10, 2007. Seven days later, ratings agencies downgraded the A+-rated investment to junk status and it remains in default. CountryMark is suing Memphis-based Morgan Keegan, a division of ... Read More

Subprime Mess at Morgan Keegan

Another class-action lawsuit related to issues regarding the disclosure of subprime debt obligations surfaced in early February when the law firm of Chitwood, Harley, Harnes LLP filed against certain mutual funds offered by Morgan Keegan Select Fund Inc. The suit, filed in Tennessee, claims that several of Morgan Keegan’s funds were invested in collaterized debt obligations (CDOs) that were backed by subprime mortgages. The lawsuit, like many others related to subprime debt obligations, claims investors who vested in the funds were not made aware of the fund’s full exposure to the risky loans until the loans faced greater deterioration in ... Read More