Investors lose $7.6 million case against Morgan Keegan
Sept 13 (Reuters) - A group of investors who claimed Morgan Keegan & Co defrauded them in their purchase of money-losing bond funds has lost a $7.6 million securities arbitration case against the brokerage, according to a ruling.
But one of the three arbitrators in case, filed in the names of several family trusts and individual retirement accounts, signed a written dissent objecting to the ruling. That could give the investors some leverage if they ask a court to throw out the ruling - an unusual move that is rarely successful, say lawyers.
The investors filed the case against Morgan Keegan, a unit of Raymond James Financial Inc, in 2010, alleging civil fraud, misrepresentation and the sale of unsuitable investments, among other things. They sought more than $7.6 million for losses stemming from bond funds that Morgan Keegan sold, according to the ruling, dated Monday.
The funds, which dropped as much as 80 percent in 2008, were the subject of a $200 million regulatory fine agreed to by Morgan Keegan in 2011. The firm was accused by federal and state regulators of inflating the value of mortgage-backed securities in the funds just as the housing market was collapsing in 2007.
Morgan Keegan was inundated by more than 1,000 cases related to the funds. Some of those cases are still winding through the Financial Industry Regulatory Authority's arbitration process.
A Morgan Keegan spokeswoman declined to comment. A lawyer for the investors did not immediately return a call requesting comment.
Arbitrators heard the case in Las Vegas. The three FINRA arbitrators, as is customary, did not provide reasons for their decisions.
- Tweet this
- Share this
- Digg this
- Storm to cloak Midwest to Northeast in snow, freezing rain
- Insight - In Yemen, al Qaeda gains sympathy amid U.S. drone strikes
- UPDATE 1-Would-be millionaires rush into 2nd-largest U.S. Mega Millions drawing
- UPDATE 2-Canada household debt-to-income ratio hits record high
- Insight: In Yemen, al Qaeda gains sympathy amid U.S. drone strikes