The Eleventh Circuit reinstated an SEC enforcement action against Morgan Keegan & Co., holding that the Northern District of Georgia erred in granting summary judgment. In SEC v. Morgan Keegan & Co., 2012 WL 1520895, the SEC alleged that the Morgan Keegan’s brokers had misrepresented auction rate securities as cash alternatives and did not disclose that ARS carried liquidity risk, according to this article.
The Eleventh Circuit held that the brokers’ alleged misstatements can be included in the materiality inquiry. The article also stated that The Eleventh Circuit said the number of investors effected was not determinative; if the brokers’ statement reached thousands or only four people, as in this case, their statements can still held to be materially misrepresentative.
If you or someone you know lost money in any Morgan Keegan product, please contact Richard Frankowski at 205-747-1903 to discuss your potential legal remedies.