The News Continues to get Worse for Morgan Keegan and its Toxic Bond Funds
Another investor received an arbitration award last week in connection with losses suffered as a result of an investment in the Morgan Keegan bond funds. Last week, an arbitration panel in San Francisco awarded an investor $267, 711 plus interest as a result of an investment in the collapsed funds. The award in San Francisco follows a series of recent awards made to investors who suffered tremendous losses when the Morgan Keegan bond funds collapsed.
The recent awards seem to indicate that the arbitration panels hearing these cases have begun to fully appreciate the misconduct that Morgan Keegan engaged in while pushing the sale of the toxic bond funds to investors. Recent investors have been able to not only cover their net “out of pocket” losses but in some cases the panels have awarded “made whole” damages compensating the investors for their legal costs and amounts that would have been received from a reasonable investment over the same time period.
According to Pratt H. Davis of Page Perry, LLC in Atlanta, GA, who, along with Mark E. Maddox of Maddox Hargett & Caruso, P.C. in Indianapolis, IN, recently represented an investor who received full “make whole” damages in a Morgan Keegan bond fund case, “The full ‘make whole’ award by the arbitration panel confirms our view that the arbitration panels are recognizing that Morgan Keegan recklessly misrepresented the nature and extreme risks associated with the funds.”
Mr. Davis continues, “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. 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 began 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 individual investors in Morgan Keegan cases. For further information, please contact us.
