Arbitration Panel Compensates Investor for Losses Sustained in Morgan Keegan Bond Funds
A Birmingham, Alabama FINRA arbitration panel recently awarded $187,000 to a retired cattle farmer from York, Alabama for losses suffered as a result of misconduct associated with the sale of Morgan Keegan bond funds. At issue were the representations and disclosures made in selling seven former Regions Morgan Keegan bond funds that have lost 90 percent of their value since mid-2007.
Pratt H. Davis of Page Perry, LLC in Atlanta, GA, along with Mark E. Maddox of Maddox Hargett & Caruso, P.C. in Indianapolis, IN, represented the investor. “The award by the arbitration panel confirms our view that Morgan Keegan committed fraud in the sale of these bond funds by misrepresenting the nature and extreme risks associated with the funds,” Davis said.
Mr. Davis continued, “It is our position that the funds contained extraordinary risks that were not disclosed to investors. The risk of the collapse of the funds was clear to Morgan Keegan when it sold the funds as the funds investments were highly concentrated in the lower level ‘tranches’ of ultra-risky structured finance products such as Collaterized Debt Obligations, Collaterized Mortgage Obligations and other asset-backed securities, many of which were directly tied to sub-prime mortgages.” When the housing market begin to slump, the funds began to implode. “The funds were sold as “diversified” but were in actuality a highly leveraged bet on the real estate industry” says Davis.
Page Perry, LLC is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry’s attorneys are actively involved in representing institutional and corporate investors in auction-rate securities cases. For further information, please contact us.
