Regions Morgan Keegan has suffered it sixth straight loss in arbitration negotiations with investors who claim they lost substantial amounts of money when RMK misrepresented its bond funds. The suits claim RMK presented the bond funds as low-risk investments, when they actually were tied to the volatile mortgage bond market. When the subprime mortgage lending crisis reached a peak, many investors lost up to 80 percent of their money almost overnight.
This week, Morgan Keegan & Co., a subsidiary of Regions Financial Corp., was ordered to pay $950,000 to investor Jerome Woods, whose claim included allegations of fraud, negligence and a breach of fiduciary duty by Morgan Keegan. Woods is a former NFL defensive back, playing for the Kansas City Chiefs from 1996-2005.
According to a report in the Investment News, Woods was involved in four RMK investment funds: The RMK High-Income Fund, the RMK Advantage Fund, the RMK Strategic Income Fund and the RMK Multi-Sector High Income Fund.
Arbitrators have awarded RMK investors more than $1.6 million to date.