Sept 13 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
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
Arbitrators heard the case in Las Vegas. The three FINRA
arbitrators, as is customary, did not provide reasons for their