Morgan Keegan /RMK Funds

Morgan Keegan is back in court, this time in a bench trial scheduled to last two weeks in front of a judge who originally dismissed the SEC regulators’ claims, according to an article in Bloomberg Businessweek. US District Judge William Duffy dismissed the action brought by the SEC which alleged Morgan Keegan misled thousands of investors about the high risks of auction-rate securities. The Court of Appeals in Atlanta, GA overruled Judge Duffy and remanded the case back down to him. Judge Duffy originally ruled that statements of the brokers were immaterial in light of disclosures on Morgan Keegan’s website, the article explains. The Court of Appeals did not agree with Judge Duffy, per the article, and the trial started on November 26, 2012. Some of the broker statements classified the auction-rate securities as “liquid, short term investments” and did not disclose that the investors’ money could be “tied up” for a very long time, according to the SEC’s opening [...]

Morgan Keegan agreed to pay over $630,000 to 10 ERISA pension plans after an investigation by the US Department of Labor, according to the Department’s press release.  The investigation found that Morgan Keegan violated federal law when it recommended certain hedge funds to the pension plans. The press release went on to state that Morgan Keegan will now disclose to all of the ERISA plans it works with if indeed Morgan Keegan is acting as a fiduciary to them and what exactly that role entails. Morgan Keegan also must disclose all fees it has collected in conjunction with the pension plans and refund any third party fees collected to the pension plans. […]

The United States Court of Appeals for the Eleventh Circuit reinstated the SEC’s civil securities fraud action against Morgan Keegan & Co. Inc., according to a Reuters.com article. This reversed the district court’s dismissal of the SEC’s action arising from Morgan Keegan’s sales of Auction Rate Securities (ARS). The Eleventh Circuit found that the alleged oral misstatements of the brokers at Morgan Keegan could have been material, according to the article. These oral misstatements could have negated the accurate written disclosures. The decision in Morgan Keegan follows The United States Supreme Court decision in Matrixx Initiatives Inc. v. Siracusano, which  reaffirmed that it is a fact-specific inquiry when determining if an alleged misstatement or omission is indeed material. […]

A Morgan Keegan broker has been barred from the industry by FINRA, according to an article on onwallstreet.com. Michael Venable, of Tyler, Texas, was barred for life from the financial industry after he jeopardized 10 of his clients. The article discussed Venable putting people into investments that were not suitable for them, sometimes without their knowledge at all, and engaging in excessive trades to garner large commissions for himself (also called “churning”). […]