Morgan Keegan Arbitration Award for Over 75% of Mutual Fund Losses

In what is believed to be the first Morgan Keegan arbitration award for losses associated with the crash of the subprime mortgage market last year, an individual investor will recover over 75% of his claimed mutual fund losses.

The FINRA (Financial Industry Regulatory Authority) arbitration award was entered in favor of Samuel P. Short, who alleged that Morgan Keegan placed him in investments that were not suitable for his needs, resulting in financial losses.

The arbitration claim was filed on January 14, 2008, involving mutual funds sold by Morgan Keegan, which are believed to be one of several Morgan Keegan bond funds which suffered substantial losses last year as a result of heavy investment in subprime mortgage backed securities.

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Morgan Keegan is the investment banking and securities arm of Regions Financial Corp., which has offices in Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee and Virginia.

Investors who held shares in several Morgan Keegan bond funds have suffered losses in excess of 50% following the collapse of the subprime mortgage market last summer. The losses have been attributed to fund managers’ decisions to place a substantial portion of the fund assets in relatively new forms of mortgage backed securities, which had not been tested through market cycles.

Morgan Keegan class action lawsuits have been filed on behalf of all investors, and a number of individual arbitration claims have also been filed against the bank to recover investment losses. Morgan Keegan lawsuits allege that false and misleading statements were made about the bond mutual funds, and that investors were not informed about the extent to which the fund held illiquid collateralized securities.

The Financial Industry Regulatory Authority (FINRA) oversees nearly 5,000 brokerage firms throughout the United States, and most broker agreements require that disputes be resolved through FINRA arbitration.

In the Morgan Keegan arbitration claim filed by Samuel Short, he sought reimbursement for $19,364.00 in losses, and was awarded $15,000 by the arbitration panel, plus interest at the rate of 5% per annum. A request for $5,000 in punitive damages wasa denied.


  • Morgan Keegan Arbitration Losses Could Exceed $200 Million : AboutLawsuits.comNovember 10, 2008 at 8:55 pm

    [...] first Morgan Keegan arbitration award stemming from the losses associated with the crash of the subprime mortgage market last year was [...]

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