Regions Morgan Keegan Securities Fraud
Regions Morgan Keegan Securities Fraud Investor Lawsuits
Regions Morgan Keegan Securities Fraud | Lawsuits, Lawyers | Damages, Money Losses | Untested Investment Structures, Misled Investors, Class Action
The lawyers and attorneys at our firm are offering free case evaluations to individuals, companies and institutions that lost more than $100,000 as a result of their investment in Regions Morgan Keegan bond funds. The Regions Morgan Keegan class action lawsuit lawyers at our firm have determined that investors in the bond funds were misled about their true risks until well after the funds sustained significant losses in 2007. Because of this deception, investors in Regions Morgan Keegan bond funds lost a total of $2 billion that year.
Investors who faced substantial losses of more than $100,000 because of investments in the Regions Morgan Keegan bond funds may be entitled to compensation. Evidence is mounting that executives and officers at Regions Morgan Keegan deliberately misled investors when they promoted their risky bond funds. If you or someone you know suffered losses as result of this deception, we urge you to contact one of our Regions Morgan Keegan class action lawsuits as soon as possible to protect your legal rights.
Regions Morgan Keegan Bond Fund Losses
Regions Morgan Keegan is the investment banking and securities division of Regions Financial Corp, the largest banking system in middle
The Regions Morgan Keegan bond funds a the center of our class action lawsuit are the Select Intermediate Bond Fund ("MKIBX") and the Select High Income Fund ("RHIIX"). Each fund had three classes of shares that it issued. Those classes are:
Regions Morgan Keegan Select Intermediate Bond Fund A (MKIBX)
Regions Morgan Keegan Select Intermediate Bond Fund C (RIBCX)
Regions Morgan Keegan Select Intermediate Bond Fund I (RIBIX)
Regions Morgan Keegan Select High Income Fund A (MKHIX)
Regions Morgan Keegan Select High Income Fund C (RHICX)
Regions Morgan Keegan Select High Income Fund I (RHIIX)
As of November 23, 2007, Morningstar reported that the Select High Income Fund's net asset value was down almost 55 percent year-to-date; from December 31, 2006 until November 30, 2007, the Select High Income Fund's net asset value per share declined from $10.14 to $3.91 for a loss of $6.23 per share, or 61.4 percent. For the same period, Morningstar reported that the Select Intermediate Bond Fund's net asset value was down over 43 percent; the Select Intermediate Bond Fund's net asset value per share declined from $9.93 to $5.07 for a loss of $4.86 per share or 48.9 percent.
In February 2008, the Securities and Exchange Commission (SEC) asked for information from Regions Morgan Keegan concerning funds that lost dramatic value in the preceding few months. The SEC was concerned because the funds had lost over 50 percent of their value since the mortgage meltdown had begun, far more than the industry average. Apparently, the regulatory agency is probing the extreme exposure to high-risk subprime mortgages within these funds.
Regions Morgan Keegan Deception
Many investors in these Regions Morgan Keegan bond funds did not know that the investments were much riskier than they had been presented. Investors were not told that mortgage-backed securities and collateralized debt obligation (CDO) made up over 50 percent of each fund’s portfolio. While such investments pay interest like ordinary bonds, they carry a much higher risk because there is a chance that the mortgages backing them will not be paid off.
In 2007, as the mortgage market began to implode, this is exactly what happened. It was only then that investors in Regions Morgan Keegan funds found they were exposed to substantially more risk than investors in other high and intermediate income funds. Investors who have filed lawsuits against Regions Morgan Keegen claim that they were not aware of the bond fund's ties to risky subprime mortgage-related assets when they made their investments.
In October 2008, a report published by the Securities Litigation and Consulting Group, Inc, concluded that Regions Morgan Keegan did indeed mislead investors about the risks associated with its bond funds. According to its report, Regions Morgan Keegan misrepresented hundreds of millions of dollars of leveraged asset-backed securities as corporate bonds and preferred stocks. This made the funds seem more diversified and less risky than they actually were, the report said.
The report concludes that had Regions Morgan Keegan performed a rudimentary analysis on its holdings (which it had to claimed to have done), it would have easily determined that investors in the funds were being exposed to as much as 10 times the credit risk of the underlying, already risky, debt. This higher risk was hardly worth taking on, as the bond funds promised investors only a 1 - 2 percent higher return than they would have expected from a diversified, transparent high-yield bond portfolio.
Since 2007 Morgan Asset Management, Inc., Morgan Keegan & Company, Inc., Regions Financial Corporation, MK Holding, Inc., Regions Financial Corporation, PricewaterhouseCoopers LLP, and certain individuals, officers and directors have been named in various class action individual lawsuits. These lawsuits were filed by and on behalf of investors who purchased shares of the Regions Morgan Keegan Select Intermediate Bond Fund and Regions Morgan Keegan Select High Income Fund from December 6, 2004 through October 3, 2007.
Many of the Regions Morgan Keegan lawsuits claim the firm violated federal and state securities laws and ignored investors' request for only safe, short-term corporate commercial paper investments. The lawsuits also claim that Regions Morgan Keegan executives did not tell them that the majority of their assets were invested in "sup-prime, illiquid and untested investment structures.
Legal Help for Regions Morgan Keegan Bond Fund Investors
If you or someone you know sustained substantial losses as a result of your investment in Regions Morgan Keegan bond funds, you may be eligible to join our class action lawsuit. Please fill out our online form, or call 1-800 YOURLAWYER (1-800-968-7529) to discuss your claim with one of our Regions Morgan Keegan class action lawsuits.