In an unusual move recently, Morgan Keegan & Co. has filed for appeal on three rulings handed down by arbitration panels against the company. This development was reported today by the Wall Street Journal / Dow Jones Newswires. In most cases of arbitration, awards are usually binding, with parties only allowed to appeal when arbitrators clearly ignore established laws.
Morgan Keegan is owned by Birmingham, Ala. based Regions Financial Corp. The regional brokerage has been beset by lawsuits since 2007, when investors suffered huge losses and alleged the investment brokerage had misrepresented several funds as “safe,” when they were in fact high-risk investments tied to the mortgage bond market.
Regions Morgan Keegan is asking the court to vacate three arbitration awards totaling just over $1 million. Morgan Keegan filed its motions to vacate in a Birmingham, Ala. court. Clients affected by this recent development include a ministry that distributes free Bibles and religious books to prisoners and their families.
The appeal will delay resolution for the affected clients whose lawsuits are now once again pending, and will also cost the shareholders of Regions Financial Corp., who are on the hook for legal fees and other costs of the delay. It is estimated the appeal could drag the case out for as long as another two years.