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
★★★★★
Alex is a very aggressive and hardworking attorney. Alex settled my Illinois Wage Payment and Collection Act case for double the amount my prior attorney asked for when the lawsuit was originally filed. I highly recommend Alex Loftus for any unpaid wage or commission claims. David R.
★★★★★
Alexander is a very detailed , highly educated attorney. Alexander represented me in a breach of Fiduciary and breach of contract case with a bank. Great job, great recommendations from Alexander on what to do and how to react to their nonsense and lies. we won the cases. Alexander really takes the time to make sure everything is done correctly and within the law. Mike M.
★★★★★
Attorney Loftus is prompt and highly skilled. I am an artist and he was swift to protect my professional work portfolio and contract with his knowledge of copyright law. Attorney Loftus is bold, professional and compassionate. Amber V.