February 18, 2013

Morgan Keegan Auction-Rate Securities Bought Back in Suit Brought by SEC

Morgan Keegan & Co. was ordered to buy back auction-rate securities (ARS) and pay $110,500 in a case in which it was accused by the Securities and Exchange Commission (SEC) of misleading customers about the risks of the investments we learn in an article from Bloomberg.

The U.S. District Judge William Duffey Jr. in Atlanta ruled yesterday that some of the company’s brokers misrepresented and omitted important information when selling the securities. The judge said the brokerage didn’t act fraudulently, ruling against the SEC on part of its case.

“Brokers apparently were lulled into describing it too broadly and neglected in their discussions with the customers discussed in this order to discuss the practical and technical requirements of an auction and the consequences of an auction failure,” the judge said in his order, referring to the auction-rate securities market.

“As a result, the evidence in this case was that the Morgan Keegan brokers discussed in this order neglected to fully inform investors of the ARS risk when marketing the ARS product, to include informing them of the risk of auction failures, the concomitant loss of liquidity, and varying interest rates,” Duffey said.

The opinion followed a non-jury trial held in November in which the SEC tried to show that the company, now owned by Raymond James Financial Inc., told clients that the more than $2 billion in securities it sold had “zero risk,” even as the market was collapsing in late 2007 and 2008.

Morgan Keegan voluntarily bought back about $2 billion in auction-rate securities from customers before the lawsuit, it said in court filings. The judge ordered that the company buy back some securities from some affected customers.

If you or a loved one purchased auction rate securities from Morgan Keegan & Co., now owned by Raymond James Financial, Inc., call Soreide Law Group, and speak to a Securities Arbitration Lawyer for a free consultation on how to recover your losses. To speak with an attorney, call 888-760-6552, or visit www.securitieslawyer.com.

S H A R E   T H I S   P O S T

Recent Posts

February 18, 2025
CONCORDE INVESTMENTS SERVICES and Bart Harrison

Soreide Law Group, based in South Florida, has filed a FINRA arbitration on behalf of their client (Claimant) against: CONCORDE INVESTMENTS SERVICES, LLC. (Respondent) The Claimant resides in Southwest Florida and maintained a relationship with CONCORDE INVESTMENTS SERVICES and its Financial Advisor, Bart Harrison. The lawsuit alleges that CONCORDE INVESTMENTS SERVICES and Bart Harrison understood […]

February 18, 2025
John Christoforidis Barred by FINRA Following Investigation

Financial Industry Regulatory Authority (FINRA) BrokerCheck reveals disclosures about securities broker John Christoforidis (CRD: 2841315, Garden City, New York). Christoforidis previously worked for multiple brokerage firms, including Spartan Capital Securities LLC from 2016 to 2024. Recent regulatory actions disclose that FINRA has barred Christoforidis from the securities industry following his refusal to provide on-the-record testimony […]

February 18, 2025
Joel Freedman Faces Allegations of Unauthorized Trading

Financial Industry Regulatory Authority (FINRA) BrokerCheck reveals disclosures about securities broker Joel Randy Freedman (CRD#: 1260557, Radnor, Pennsylvania). Freedman has been employed in the securities industry for 40 years and has worked with several firms, including Morgan Stanley (2009-2024). As of April 2024, he is registered with Sanctuary Securities Inc. and Sanctuary Advisors LLC in […]

Contact us Nationwide USA
2401 E. Atlantic Blvd., Suite 305, Pompano Beach, FL 33062
Helping clients recover money across the USA
search
Copyright © 2022 Soreide Law Group, PLLC  |  All Rights Reserved