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.
Soreide Law Group has filed a FINRA arbitration on behalf of our clients (Claimants) against: CONCORDE INVESTMENTS SERVICES, LLC, and BERTHEL, FISHER & COMPANY FINANCIAL SERVICES, INC (Respondents). The Claimants are in their late 70s, retired, and according to the lawsuit, were not looking to take any unnecessary risks with their retirement savings. The Claimants […]
THEODORE WILLIAM BYRER (THEODORE W BYRER, TED BYRER) was registered as a broker with MORGAN STANLEY of Indianapolis, Indiana, from 11/11/2013 - 04/20/2023. He was most recently registered with INTERNATIONAL ASSETS ADVISORY, INC of Westfield, Indiana, from 05/09/2023 - 09/17/2024. According to his BrokerCheck CRD report, dated 7/23/2026, THEODORE W BYRER was suspended for 14 […]
MARK LAWRENCE SULLIVAN (MARK SULLIVAN, MARK L SULLIVAN), formerly with UBS Wealth Management USA in New York City, was fined $10,000 and suspended for three months by the Financial Industry Regulatory Authority (FINRA) over allegations that he traded in customers’ accounts without the proper approval. Sullivan was previously registered both as a broker and as an […]
Phone:
Fax: 1-954-760-6553
Email: info@securitieslawyer.com