Sports broadcaster Tim McCarver is just the latest angry investor to file a claim against <"https://www.yourlawyer.com/topics/overview/Regions_Morgan_Keegan_Securities_Fraud">Regions Morgan Keegan over its failed bond funds.Â Â According to theÂ New York Post, McCarver is seeking $1.25 million in damages because of the losses he suffered when the Morgan Keegan funds crashed in 2007.
Regions Morgan Keegan is facing an avalanche of arbitration claims overÂ the failed bond funds. Plaintiffâ€™s lawyers say 1,000 to 1,500 arbitration cases ultimately could be filed against Morgan Keegan.
McCarver, a former Major League Baseball catcher, and now a color commentator for Fox Sports, claims he lost $1 million from his investment account after his broker failed to heed his instructions and keep his money in conservative investments.Â Â According to his lawyer, representatives of Morgan Keegan led McCarver to believe that his money was being held in investments that “were tantamount to buying CDs and [safe] bonds,” the New York Post said.
McCarver’s lawyer told the Post that his arbitration claim is scheduled to be heard by the Financial Industry Regulatory Authority in early 2009.
In 2007, the Regions Morgan Keegan Select Intermediate Bond Fund and Regions Morgan Keegan Select High Income FundÂ lost up to 95 percent of their value, thanks to losing bets on high-risk collateralized debt obligations. Last month, the Securities Litigation and Consulting Group, Inc, a financial economics consulting firm that provides expert witnesses to parties involved in securities litigation,Â issued a report that found Regions Morgan Keegan misrepresented hundreds of millions of dollars of leveraged asset-backed securities as corporate bonds and preferred stocks.Â This made the funds seem more diversified and less risky than they actually were, the report said.
The report concluded that had Regions Morgan Keegan performed a rudimentary analysis on its holdings – as it had claimed to have done – it would have determined that investors in the funds were being exposedÂ as much as 10 times the credit risk of the underlying, already risky, debt in exchange for 1 percent or 2 percent higher returns than a diversified, transparent high-yield bond portfolio would have earned.