Department of Financial Institutions
Federal and State Regulators Appoint Administrator to Return $200 Million to Investors
FRANKFORT - Oct. 27, 2011 - The U.S. Securities & Exchange Commission and regulators from Tennessee, Alabama, Kentucky, Mississippi, and South Carolina announced today the appointment of A.B. Data, Ltd. of Milwaukee to distribute $200 million to investors from the regulators’ settlements with Morgan Keegan & Company and Morgan Asset Management.
The settlements resulted from an investigation of seven proprietary bond funds sold by Regions Morgan Keegan to more than 30,000 account holders. The firms were charged with sales violations and fraudulently overvaluing the funds which lost approximately $1.5 billion in value from March 31, 2007, to March 31, 2008. The SEC’s and the five states’ Administrative Orders , required Morgan Keegan and Morgan Asset Management to pay a total of $200 million to establish an SEC Fair Fund and a States’ Fund, both for the benefit of investors. A.B. Data has previously administered several large settlement funds in securities litigation cases and for the SEC.
The A.B. Data website for investor information is: http://www.abdataclassaction.com/ under “Morgan Keegan Settlement.” Further, A.B. Data has set up live operators available for questions from investors and they will be available for the duration of the claims process (888-208-9083) during normal business hours. (Central time zone) Investor inquiries may also be directed by mail to: Morgan Keegan Settlement, Claims Administrator, c/o A.B. Data Ltd., PO Box 170500, Milwaukee, WI 53217-8091.
The federal and state regulators’ Orders also required that the costs for establishing, managing and disbursing these funds shall be paid separately by Morgan Keegan and Morgan Asset Management and will not be paid out of the $200 million in settlement funds which will all go to investors based on the filing of claims. The regulators’ Orders provided that nothing in the settlement requires any investor to give up any rights in arbitration or any other proceeding that the investors are legally entitled to initiate. Investors are not signing releases and the filing of a claim has no effect on whether investors are allowed to bring other claims.
Investors who purchased any of the Regions Morgan Keegan Funds from other broker-dealers are also allowed to file claims for their losses. However, it is important that these investors contact the Fund Administrator instead of waiting to be contacted because the Fund Administrator does not have the transaction data for investors that did not have an account at Morgan Keegan.
Kentucky's securities regulator is the Department of Financial Institutions (DFI). DFI is an agency in the Public Protection Cabinet. It supervises the financial services industry by examining, chartering, licensing and registering various financial institutions, securities firms and professionals operating in Kentucky. DFI’s mission is to serve Kentucky residents and protect their financial interests by maintaining a stable financial industry, continuing effective and efficient regulatory oversight, promoting consumer confidence, and encouraging economic opportunities.
1 - To see SEC’s Order go to: http://www.sec.gov/litigation/admin/2011/34-65227.pdf
2 - To see Kentucky’s Order go to: http://kfi.ky.gov/legal/Pages/morgankeegan.aspx.
- To see Tennessee’s Order go to: http://1.usa.gov/qI9NzR
- To see Alabama’s Order go to: http://www.asc.alabama.gov/ and click on “Morgan Keegan Bond Fund Case”
- To see South Carolina’s Order go to: http://www.scag.gov/scsecurities/notices-and-orders
- To see Mississippi’s Order go to: http://www.sos.ms.gov/