Regions Financial Corp. said its Morgan Keegan & Co. investment-banking operation may face charges related to "certain mutual funds" formerly run by an asset-management unit with a well-known manager who was clobbered by exposure to collateralized debt obligations and other mortgage-related holdings.
In a securities filing, the Birmingham, Ala., regional bank said it received on July 9 a Wells notice from the Securities and Exchange Commission's regional office in Atlanta.
Regions was told that SEC "staff intends to recommend that the commission bring enforcement actions for possible violations of the federal securities laws," the filing said.
Regions didn't disclose in the filing which mutual funds are being scrutinized by the SEC, except that they were managed by Morgan Asset Management Inc., part of Morgan Keegan, a regional brokerage firm based in Memphis, Tenn.
Regions said Wednesday that it transferred management of those funds last July to Hyperion Brookfield Asset Management Inc. of New York.
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