Category Archives: Bond Losses

CountryMark Cooperative filed a federal lawsuit in Indianapolis last week against Morgan Keegan (the brokerage subsidiary of Regions Financial Corp.) alleging violations of state and federal securities laws.  CountryMark contends that Morgan Keegan, its advisor, invested $10 million into mortgage-backed securities that contained subprime loans.

According to the Indianapolis Star, the co-op alleges that its $10 million note is in default and worthless because no trading market exists for it.

The CountryMark suit is the latest in a growing list of lawsuits and arbitrations filed against Morgan Keegan by investors.  As the subprime mortgage loan crisis continues, it can be expected that more and more investors will become aware of investment losses and will seek counsel.  Maddox Hargett & Caruso, P.C. has investigated these practices and has been retained by a number of investors seeking to recover their investment losses. 

If you have suffered losses at Morgan Keegan through investments containing mortgage-backed securities, we encourage you to contact us immediately so that we can evaluate the facts and circumstances surrounding how those investments were presented to you and whether this investment was appropriate for your investment portfolio.

Even as investors line up to file arbitration claims against Morgan Keegan relating to the sales and performance of several of their proprietary funds, two of their much maligned bond funds top the list of worst-performing bond funds for the January 2008.

RMK Select Intermediate Bond (RIBIX) and RMK Select High Income (RHIIX) saw total returns in January of -17.3% and -11.3% respectively.

As of December 31, 2007, these two funds had total combined assets of $145.2 million. 

As this  poor performance continues, it can be expected that more and more investors will file arbitration claims seeking recovery of their losses. The key focus in many of these claims will be on what disclosures were made (or not made) to investors who were sold these funds. Additionally, many claims already on file have claimed that these funds were pitched and sold as very safe, conservative investments not dissimilar from CDs. Clearly these investments cannot be compared to CDs or any other generally regarded safe, income producing investment.