$541,000 Award Against Morgan Keegan For Bond Funds Purchased At On-Line Brokerage Firm

Morgan Keegan loses case involving RMK High Income Fund (RMH), RMK Advantage Income Fund (RMA), the RMK Strategic Income Fund (RSF) and the RMK Multi-Sector Income Fund (RHY). The Little Rock, Arkansas FINRA arbitration panel awarded the Claimants $541,000, or roughly 90% of the $615,000 that they had asked for. The interesting thing about this case is that the investors did not purchase the funds through Morgan Keegan. According to news releases, the Claimants were retirees who researched the funds on the internet and made the purchases through an on-line brokerage service. Based on the research and the SEC filings, they determined that the funds were safer than equities and the disclosure regarding the concentration in the bottom tranches of the structured products was not made by Morgan Keegan. The panel obviously agreed. (FINRA# 09-04501; Herschel Zarecor IRA et al. v. Morgan Keegan & Company, Inc.)

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