Justia Lawyer Rating
Super Lawyers
AVVO - Joseph Robert Top Attorney
Avvo Reviews - Joseph Robert
AVVO - Alexander Nicholas Top Attorney
Avvo Reviews - Alexander Nicholas

Morgan Keegan Ordered to Repay $267,000

Nashville Business Journal, April 3, 2008 (Crystal Jarvis)

Regions Financial Corp.’s brokerage firm, Morgan Keegan & Co., was ordered to repay an investor $267,711 in losses incurred in the company’s mortgage-backed bond funds that collapsed amid the subprime crisis.

The Financial Industry Regulatory Authority ordered the Memphis-based company to pay a San Francisco-based investor all losses plus interest and court costs, said Chicago-based arbitration lawyer Andrew Stoltmann, who handled the case.

The award – which is the largest arbitration award against Morgan Keegan’s bond funds as of late – set a precedent for pending arbitration lawsuits against the company, Stoltmann said.

“There has been some nefarious stuff that (has) come out in the last two months that has changed the dynamics of these cases and made them better,” he said. “An award like that is a real clear sign that the arbitrators were upset with what they heard.”

The “tide has turned” in favor of the plaintiffs because it has been established that 10 percent to 15 percent of the funds were being misclassified as safer investments, Stoltmann said.

“I don’t think there is any question that the tide has turned on these cases, and we’re going to see a tsunami of awards going forward that will come crashing down on top of Morgan Keegan,” he said.

This is the fifth-straight case in which the company was defeated, Stoltmann said.

The company has lost nine out of the 21 cases heard thus far, said Morgan Keegan spokeswoman Kathy Ridley. And 12 of the cases did not receive any money, she said.

“We believe the overall results support our belief that there were no improprieties in the management of these funds,” she said. “We will continue to vigorously defend all claims.”

Morgan Keegan came under fire last year after a number of funds managed by the company lost value once the market for collateral-backed debt obligations – underpinned by risky subprime mortgages – declined due to skyrocketing loan defaults and the ailing U.S. housing market.

Some of the bond funds fell by more than 70 percent last year, according to data compiled by Chicago-based Morningstar Inc.

Morgan Keegan & Co. is a subsidiary of Birmingham-based Regions Financial Corp., which is Nashville’s largest bank with more than $6 billion in deposits.

Client Reviews
Working with Joe was an absolute pleasure considering the unfortunate situation I was dealing with! He’s very knowledgeable and easy to communicate with. He kept me informed in all aspects of my case in a timely manner. Whenever I contacted him with a question he responded quickly. His expertise came through for me! I would highly recommend him! Joanne
I hired Joe and his firm Stoltmann Law office to represent me in a case where my investment guy had lost a substantial amount of money in my account. He invested in some very speculative energy stocks which should not have been in my portfolio due to my request for a very conservative investment portfolio. I was very impressed and satisfied with the representation and negotiations on my behalf by Joe and Stoltmann Law offices and I would definitely recommend them to anyone who would be in need of a very fine firm. Anonymous
Never having a need to file suit against anyone, let alone a major multi-national brokerage firm, I was at a loss to find a legal firm to assist me. After much searching, I found Stoltmann Law Offices, PC. They were very diligent and professional in the handling of my case and I am glad that I retained their services. I would definitely refer them to anyone seeking similar help. Donald F.