Morgan Keegan scores an arbitration win over bond fund blowups

After a string of high-profile securities arbitration losses, Morgan Keegan & Co. Inc. emerged as a winner in an $8.2 million investor complaint that alleged unsuitability and breach of fiduciary duty related to firm's bond funds.
FEB 25, 2010
After a string of high-profile securities arbitration losses, Morgan Keegan & Co. Inc. emerged as a winner in an $8.2 million investor complaint that alleged unsuitability and breach of fiduciary duty related to firm's bond funds. Morgan Keegan, a broker-dealer subsidiary of Regions Financial Corp., is faced with hundreds of arbitration claims from investors who bought the company's bond funds and have seen as much as 95% of the funds' value evaporate since mid-2007. This year, Morgan Keegan lost cases of $1.45 million to Horace Grant, a former NBA all-star, and $950,000 to ex-NFL Pro Bowler Jerome Woods. The investors whose claims were just denied were led by William Strong, who filed the claim against Morgan Keegan in January 2008. The Strong Company Inc., another claimant listed on the lawsuit, produces construction and maintenance products. Mr. Strong did not return a call seeking comment. A three-member panel of the Financial Industry Regulatory Authority Inc. last month also ordered the claimants to pay Morgan Keegan $157,000 in attorney's fees and $20,000 in fees for expert witnesses. As is typical in most arbitration decisions, the panel gave no explanation for their decision, saying simply that the claims “were denied in their entirety.” Those awards are significant, said Michael Brady, an attorney in the matter for Morgan Keegan. “The attorney fee award against these claimants is an obvious indication that the arbitrators believed the claims were unwarranted and that Morgan Keegan deserved to be reimbursed for at least some of the costs incurred in defending the case,” he said.

Latest News

SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees
SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees

Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.

Apella Wealth comes to Washington with Independence Wealth Advisors
Apella Wealth comes to Washington with Independence Wealth Advisors

The Harford, Connecticut-based RIA is expanding into a new market in the mid-Atlantic region while crossing another billion-dollar milestone.

Citi's Sieg sees rich clients pivoting from US to UK
Citi's Sieg sees rich clients pivoting from US to UK

The Wall Street giant's global wealth head says affluent clients are shifting away from America amid growing fallout from President Donald Trump's hardline politics.

US employment report reactions: Overall better than expected, but concerns with underlying data
US employment report reactions: Overall better than expected, but concerns with underlying data

Chief economists, advisors, and chief investment officers share their reactions to the June US employment report.

Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading
Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading

"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.