Two brothers, Edward and Roderick King, were awarded almost $700,000 by a Birmingham arbitration panel of the Financial Industry Regulatory Authority (FINRA) for their claims involving a group of collapsed Regions Morgan Keegan mutual funds. One of the brothers, Edward, had once been a local president in Florida for Regions Bank. Regions now owns Morgan Keegan.
According to their complaint, the Kings accused Morgan Keegan of the following violations in connection to certain RMK funds: misrepresentations and omissions, violation of the Alabama Securities Act, breach of fiduciary duty, fraudulent misrepresentation and breach of contract.
The funds cited in the Kings’ FINRA claim include the Regions Morgan Keegan High Income Fund, Regions Morgan Keegan Advantage Income Fund, Regions Morgan Keegan Multi-Sector High Income Fund, Regions Morgan Keegan Strategic Income Fund, Regions Morgan Keegan Select Intermediate Bond Fund, and Regions Morgan Keegan Select High Income Fund.
Morgan Keegan is the subject of numerous arbitration cases across the country for investor losses related to proprietary bond mutual funds that were once managed by former Morgan Keegan employee James Kelsoe. The funds, which had been marketed and sold as low to moderate risk funds, collectively lost more than $2 billion in 2007 and 2008 because of risky investments in low-tier and illiquid tranches of asset backed securities.
FINRA’s decision in the King brothers case follows other recent FINRA awards against Morgan Keegan, including $285,000 to a Jackson, Mississippi, investor (FINRA #08-00574), $950,000 to an NFL football player Jerome Woods (FINRA #07-03570) and $431,000 to Philip Richardson of Boca Raton, Florida (FINRA #08-01333).