Home > Blog > Morgan Keegan Scorecard: Investors Win 5 Of 6 Recent Claims

Morgan Keegan Scorecard: Investors Win 5 Of 6 Recent Claims

In May and June, investors prevailed in five out of six arbitration claims against Memphis brokerage firm Morgan Keegan. Meanwhile, hundreds of additional individual arbitration claims await decisions from the Financial Industry Regulatory Authority (FINRA).

Since 2008, thousands of investors have suffered more than $1 billion in losses from a group of mortgage-related Morgan Keegan bond funds. The funds, whose investments were tied to the real estate market, plummeted by as much as 80% following the burst of the housing bubble.

In the lawsuits and arbitration claims that have followed, investors accuse Morgan Keegan of misrepresenting or failing to disclose certain facts about their investments.

In April 2010, regulators charged Morgan Keegan and two employees with fraud for inflating the value of mortgage securities and other risky debt held in the bond funds at the center of the ongoing litigation. The complaint – which was filed by the Securities and Exchange Commission (SEC), FINRA and various state securities regulators – also charged Morgan Keegan portfolio manager James Kelsoe of improperly directing his accounting department to make repeated, arbitrary “price adjustments” that boosted the fair values of securities.

Morgan Keegan’s Joseph Thompson Weller, who led the accounting department, is named in the complaint, as well.

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