Just a few weeks after the 11th Circuit Court ordered Morgan Keegan to buy back more of their ultra-risky auction rate securities, Raymond James dropped the name Morgan Keegan altogether. In November 2012, this blog reported that 11th Circuit Judge William Duffy dismissed an SEC claim against Morgan Keegan. According to the article underlining the blog post, District Judge Duffy dismissed the SEC claims, ruling that the brokers’ misleading statements were not material and that the brokers could not predict the market. However, the Court of Appeals disagreed with Judge Duffy and remanded the case back to the judge for a non-jury trial.
The Bloomberg.com article discussed Judge Duffy’s opinion, which said that the brokerage firm did not act fraudulently but some of its brokers negligently made misrepresentations and omitted important information about the securities sold. Though Morgan Keegan voluntarily bought back around $2 billion of the highly-risky auction rate securities, according to the article, Judge Duffy ordered still more of the risky securities to be purchased back from the investors adversely affected by the high-risk funds and the misrepresentations surrounding them. Morgan Keegan was also ordered to pay a fine of over $100,000 per the Bloomberg.com article.
This decision came just a month before Raymond James Financial announced plans to drop Morgan Keegan from the name of its fixed-income arm. The onwallstreet.com article quoted Raymond James CEO Paul Reilly as saying that the two companies have reached a “cultural integration.” The article also quoted Mr. Reilly as saying that Morgan Keegan was the one that requested their name be dropped.
If you or someone you know has lost money as a result of a Morgan Keegan product, please contact Richard Frankowski at 205-747-1903 to discuss your potential legal remedies.