A Birmingham, Alabama FINRA arbitration panel awarded $187,000 to a retired cattle farmer from York, Alabama for losses suffered in Morgan Keegan bond funds. "This is believed to be the largest arbitration award against Regions Financial Corp.'s NYSE:RF) Morgan Keegan division for its sale of bond funds that cost investors over 2Billion Dollars," said attorney Mark E. Maddox of Maddox Hargett & Caruso, P.C. in Indianapolis, IN, who represented the investor Philip Willingham. "It is also the first make-whole award in favor of a Morgan Keegan bond fund investor."
"This arbitration award affirms our view that Morgan Keegan engaged in a massive scheme to defraud many investors, including Philip Willingham, in the sale of its bond funds," says Maddox.
"It is becoming apparent that the evidence that investors are now able to present about the scope of Morgan Keegan's misconduct and the significant investigations that are being conducted by the Securities and Exchange Commission and state securities regulators are catching up with Morgan Keegan, and allowing arbitrators to better understand the scope of its misconduct," added Maddox.
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I was AManaging Director at MK for 8 yesra and had my money in the High Yield Bond Fund that was managed by Jim Kelsoe. Mr Kelsoe is a fine guy however, MK's mangement knew exactly what was in those funds and understood the nature of the credits. However,they didn't understand all of the risk and default risk in these bonds that made up the fund. However, they did sell them as very low risk and in some cases "guaranteed"... i am glad to see justice done here, MK has also misrepresented Auction Rate Muni Bonds as well- being investigated by SEC-
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