Regions Financial Corp., based in Birmingham, Ala., was on the recent Market Watch list of “notable moves” in the stock market. Unfortunately for the company, it was listed alongside General Motors (GM) on the list of “decliners” after experiencing a 5.9 percent drop in stock value.
According to the report, the drop is tied to more losses in arbitration cases related to its Morgan Keegan bond fund unit, which lost $2 billion in risky asset-backed securities. Investors are suing Regions Morgan Keegan, alleging the investments were misrepresented as “safe” funds, when they were in fact tied to the volatile mortgage lending industry. When the industry went bust, investors lost up to 80 percent of their savings, practically overnight.
So far, the Financial Industry Regulatory Authority (FINRA), which is overseeing arbitration of these claims, has sided with investors every time, awarding nearly $2 million in damages to date. Recent judgments include $285,000 to a Vietnam Veteran in Mississippi, and nearly $1 million to former NFL star Jerome Woods, Market Watch reports.