Morgan Keegan & Co. Inc.’s legal fees and related expenses costs have increased dramatically over the past several years, due in large part to ongoing litigation over losses sustained by investors who purchased RMK Morgan Keegan bond funds. The Funds imploded in late 2007, some losing nearly 95% of their value allegedly due to high concentrations of subprime mortgage related derivatives and tranches.
According to a recent Investment News article, legal fees accounted to approximately 12% of total revenue for the brokerage unite of Regions Bank. This percentage far exceeds the legal fees (as a % of revenue) for most other brokerage firms.
Also, Morgan Keegan has suffered significant arbitration losses over the past week. Arbitrators in two separate claims awarded $2.5 million and $1.1 million to RMK Fund investors.
Additionally, in July of last year, the Securities & Exchange Commission (SEC) issued a Wells notice to Morgan Keegan related to the bond funds. This could mean the SEC is contemplating disciplinary action against the firm for the marketing and sale of the RMK bond funds.
If you have lost money in the RMK Morgan Keegan bond and income funds, please contact our offices for a free case evaluation. Thank you.