CHICAGO, Jan. 25, 2008 (PRIME NEWSWIRE) -- Stoltmann Law Offices announces that it has filed four additional FINRA arbitration complaints today against brokerage firm Morgan Keegan for seven clients.
The arbitration statements of claim allege fraud, misrepresentations and omissions related to the failure of the firm to fully disclose risks associated with the Morgan Keegan mutual fund investments in subprime related sectors, according to Andrew Stoltmann, of Stoltmann Law Offices, in Chicago.
The claims seek recovery of investment losses of a combined $3,583,723, along with attorney's fees, interest and punitive damages. Stoltmann Law Offices expects to file another 25 claims against Morgan Keegan in upcoming weeks. The most recent four filings are on top of the $2 million in FINRA arbitration claims announced by the firm on January 8, 2008.
The funds owned by the complaining investors include Morgan Keegan Select Intermediate Bond Fund ("Intermediate Fund"), Regions Morgan Keegan Select High Income Fund ("High Income Fund") and closed-end funds RMK Multi Sector High Income Fund (RHY), RMK Strategic Income Fund (RSF), RMK Advantage Income Fund (RMA) and the RMK High Income Fund (RMH).
According to the FINRA statements of claim, the Morgan Keegan funds were heavily invested in collateralized bond obligations ("CBOs"), collateralized loan obligations ("CLOs"), and collateralized mortgage obligations ("CMOs"), collectively referred to as "collateralized debt obligations" ("CDOs") or "structured financial instruments." These securities are typically thinly traded -- in other words, market quotations for these securities are not readily available -- and are practically illiquid. As a consequence, the values of these securities can only be estimated by Morgan Keegan.
The complaints also allege that the funds marketing material and prospectuses were misleading. For example, the Morgan Keegan Intermediate Fund literature stated one of the major advantages of the fund was it consisted of a "diversified portfolio of mostly investment-grade debt instruments." In fact, the funds were concentrated in low-rated subprime related investments.
The statements of claim filed by the Stoltmann Law Offices do not name Morgan Keegan advisors who recommended the bond funds. According to Mr. Stoltmann, "We believe that the advisors at Morgan Keegan were as big of victims as many of the investors. The firm misled the advisors and the advisor's clients ended up paying the ultimate financial price."
Mr. Stoltmann also warned, "Unfortunately, class action lawyers have filed multiple lawsuits against Morgan Keegan. Unless clients 'opt out' of the class action lawsuit once it is certified, they are automatically in the class action. Often, class action settlements lead to very paltry settlements for clients. Morgan Keegan bond fund victims must be aware that if they stay in the class action case, they cannot also pursue an arbitration recovery."
More information is available at www.MorganKeeganFraud.com or www.InvestmentFraud.Pro.