For Immediate Release
Contact: Catherine Lu
(702) 486-6982 / 334-7953
(Carson City, NV; February 16, 2012) – Nevada Secretary of State Ross Miller’s Securities Division executed an administrative consent order that provides restitution for 41 Nevadans who lost approximately $5 million by investing in funds whose high risks were not properly disclosed by broker dealer Morgan Keegan & Company, Inc. (MKC) and its affiliate Morgan Asset Management, Inc. (MAM)
Nevada’s order is entered in conjunction with a multistate task force investigation that nets investors a $200 million settlement from MKC and MAM. The U.S. Securities & Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) also conducted investigations of the companies.
Among the issues raised in the investigations include failing to adequately disclose some of the risks associated with investments in MAM’s offered funds in reports filed with the SEC; classifying approximately $400 million of asset-backed securities as corporate bonds and preferred stocks when they were the lower tranches of asset-backed structured debt instruments; using industry benchmarks not directly comparable to the investment funds; and incorrectly characterizing funds and their holdings.
Of the $200 million settlement, $100 million will be apportioned to the SEC’s Fair Fund established for the investors who are the subject of the SEC order, and $100 million to a States’ Fund established for the investors who are the subject of the consent order. An administrator for both funds will create distribution plans to affected investors. Any questions regarding rights to a reimbursement should be directed to the fund administrator:
Morgan Keegan Settlement
c/o A.B. Data, Ltd.
P.O. Box 170500
Milwaukee, WI 53217
Toll-Free Number: (888) 208-9083
Direct Number: (414) 961-6595
The multistate task force was comprised of securities regulators from Alabama, South Carolina, Kentucky, Tennessee, and Mississippi.
The full administrative consent order can be downloaded here or on the Secretary of State’s website under “Announcements.”
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