Earlier this month, it was announced that Morgan Keegan & Co., the brokerage firm owned by Regions Financial Corp., would be required to repay an investor $267,711 for losses suffered by the collapse of Regions Morgan Keegan investment funds. According to CCNMoney, this is the largest bond fund arbitration award to date.
Hundreds of investors lost significant amounts of money nearly overnight as a result of monies invested in mortgage-backed funds that collapsed in the subprime lending crisis. Lawsuits against Regions Morgan Keegan allege the funds were represented to investors as low-risk preferred stocks and corporate bonds, when in fact they were some of the most risky investments available.
According to the CNNMoney report, this is the fifth straight Financial Industry Regulatory Authority (FINRA) arbitration award against Morgan Keegan for these proprietary bond funds. Previous award have included $50,000 to an Alabama retiree who lost his savings, and $187,000 to compensate a farmer with losses of $100,000 in the funds.
The most recent verdict sets a precedent for remaining pending arbitration lawsuits against the company.