According to Reuters, a Financial Industry Regulatory
Authority (FINRA) arbitration panel in Boca Raton, Florida,
rescinded investors' claim against Morgan Keegan & Co., a
Raymond James Financial Inc.
). The arbitration claim made by the group of investors, accused
Morgan Keegan of misrepresenting documents related to a series of
troubled bond funds.
These troubled funds issued by Morgan Keegan, lost as much as 80%
of their value in 2008. Therefore, the unit agreed to pay $200
million as regulatory fine for settlement of enforcement actions
by regulators related to the funds.
Later on, in 2010, Morgan Keegan was sued by a group of
investors, including two trusts and a family limited partnership
related to these funds. The complaint lodged claims that Morgan
Keegan distorted documents and sold inappropriate funds. They
implicated this brokerage firm of issuing misleading statements
and making omissions related to these funds as well as concealing
the risks associated with it. Investors' demands included $1.9
million in damages for losses and other penalties.
Alongside, Morgan Keegan was accused by federal and state
regulators for escalating the value of mortgage-backed securities
in the funds fraudulently, at the time of the housing market
bubble in 2007.
Moreover, this brokerage firm was swamped by over 1,000 cases
associated with the funds. Yet, some of these cases are still
pending in the FINRA arbitration process.
Though Morgan Keegan was acquired by Raymond James in 2012, but
Regions Financial Corporation
), remains responsible for paying claims, if any, as the funds
disaster took place before the acquisition.
However, spokespersons of all related parties refrained from
issuing any comments.
Financial regulators are proactively trying to recover losses
through lawsuits against banks that were involved in malpractices
related to the selling of troubled securities and bonds. The
continuously increasing number of lawsuits tends to dent the
institutions' reputation and financials. However, the investors,
who were duped through such investments, should come up with
strong evidence to recoup such losses and receive their
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