In re Regions Morgan Keegan Open-End Mutual Fund Litigation, Civil Action No. 2:07-cv-02784-SHM-dkv (W.D. Tenn).
This shareholders class action alleges federal securities law violations. The shareholders allege that they were fraudulently induced to invest in one of the six RMK funds advised or managed by Defendant Regions and Morgan Asset Management and then lost money as a result of the Funds’ collapse.
WHO BROUGHT THIS CASE?
Investors who lost life savings in certain Morgan Keegan funds are asserting claims against Morgan Keegan and its affiliates.
WHERE IS THE CASE BEING LITIGATED?
The case was filed on Dec. 7, 2007, in federal court in the Western District of Tennessee before the Honorable Samuel H. Mays. The case is captioned In re Regions Morgan Keegan Open-End Mutual Fund Litigation, Civil Action No. 2:07-cv-02784-SHM-dkv (W.D. Tenn).
WHAT ENTITIES ARE NAMED IN THE LAWSUIT?
- Morgan Asset Management, Inc.
- Morgan Keegan & Company, Inc.
- MK Holding, Inc.
- Regions Financial Corporation (NYSE:RF)
- Regions Bank
- PricewaterhouseCoopers LLP, and
- Certain individuals, officers and directors associated with the above entities
WHICH INVESTORS ARE INVOLVED?
The case is brought on behalf of investors who purchased shares of the following Regions Morgan Keegan (RMK) funds:
- RMK Select Intermediate Bond Fund ("MKIBX")
- RMK Select High Income Fund ("RHIIX”) and
- RMK Short Term Bond Fund (“MSBIX”)
On September 30, 2009, the Court appointed the investors to serve as Lead Plaintiffs and their attorneys to serve as Lead Counsel on behalf of a putative class of investors in the above funds.
WASN’T THERE A RECENT DECISION AGAINST INVESTORS?
Yes. A federal court in the Northern District of Georgia ruled in favor of Morgan Keegan in a lawsuit filed by the SEC. In July 2009, the SEC filed a case against Morgan Keegan, claiming that Morgan Keegan misled investors about the risks of auction rate securities. On June 28, 2011, the court granted Morgan Keegan’s motion for summary judgment and dismissed the lawsuit. The court found that the SEC didn’t introduce evidence that Morgan Keegan backed a company-wide policy that encouraged brokers to mislead investors. The SEC appealed the ruling to the Eleventh Circuit. The Eleventh Circuit heard oral arguments on March 13, 2012, but has yet to issue a decision.
February 2010: On February 11, 2010, Defendants filed a motion to dismiss Plaintiffs’ Consolidated Amended Complaint and Plaintiffs opposed this motion. The Court issued an Order on September 30, 2010 upholding Plaintiffs’ claims under the Securities Act of 1933. Plaintiffs' claims under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 were dismissed.
November 2009: On November 30, 2009, Plaintiffs filed a Consolidated Amended Complaint. The investors’ Complaint asserts that the defendants violated, or are otherwise liable under, Sections 11, 12 and 15 of the federal Securities Act of 1933 and Sections 34(b), 13, 22, 31 & 47 of the Investment Company Act of 1940, and under section 10(b) & 20 of the Securities Exchange Act of 1934.