Morgan Keegan's Woes Continue

Morgan Keegan continues to work its way through the multitude of arbitration claims and lawsuits filed by investors who were allegedly defrauded in the sale of more than $2 billion worth of their proprietary bond funds backed by risky subprime mortgages. Of the 129 arbitration claims filed by investors and heard by panels prior to February 2011, Claimants have received $24.7 million in awards, according to a Morgan Keegan spokeswoman. That number does not include the 100 or so cases where confidential settlements were reached. The funds that were sold in 2006 and 2007, as being safe investments that would provide a good income stream with better than average returns, suffered dramatic losses in 2008. Some very recent cases are as follows:

A recent case in Houston, TX resulted in an award to the Claimant of $66,741 in compensatory damages; $5,000 for costs; $9,250 in costs and expert witness fees. Morgan Keegan was also assessed all of the forum fees for $13,500. (FINRA #09-04638; Louis E. Liles v. Morgan Keegan & Company, Inc.)

Another case in Nashville, TN resulted in an award to the Claimant of $283,708 in compensatory damages; $70,927 for attorneys’ fees and costs in the amount of $18,500 for a total of $373,135. The panel in that case split the $8,000 in forum fees equally between the parties. (FINRA #08-03266; Edward W. Karrels v. Morgan Keegan & Company, Inc.)

Finally, a FINRA panel in New Orleans, LA recently awarded the Claimant $107,100 in compensatory damages and assessed all of the forum fees of $17,250 against Morgan Keegan. (FINRA #09-05421; Randall Fausak v. Morgan Keegan & Company, Inc.)

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