Globe Newswire, May 11, 2009

A Birmingham, Alabama FINRA arbitration panel last Friday awarded two Alabama residents their full losses, attorney fees, statutory interest and costs in an arbitration award of almost $700,000. The arbitration claim centered around purchases of Regions Financial Corp.’s (RF) brokerage firm subsidiary Morgan Keegan’s proprietary bond funds managed by James C. Kelsoe.

The award was the second largest nationally against Morgan Keegan arising out of the meltdown of the firm’s bond funds. According to attorney Andrew Stoltmann, who represented the investors in the arbitration claim, “The awarding of almost $700,000 in a claim where the principal losses were about $455,000 is a crystal clear message sent to Morgan Keegan that the arbitrators were repulsed by the firm’s derivative laced mutual funds and the actions of the firm.”

The client’s net losses were $302,989. The principal losses were $455,669. The Panel awarded the Claimants $455,669 in compensatory damages, $151,738 in attorney fees, $62,882 in statutory interest, and $12,500 in expenses. The case, heard in Birmingham, Alabama, is captioned Edward King and Roderick King v. Morgan Keegan & Company, Inc. (Case Number 08-00336).

According to the investors’ attorney, Andrew Stoltmann, “This ‘make whole’ arbitration award, granting of losses, attorney fees, interest and costs, affirms our view that Morgan Keegan clearly took advantage of thousands of unsuspecting investors nationally. These funds contained extraordinarily risky derivatives that were unsuitable and inappropriate for virtually any investor, much less retirees who didn’t want to gamble. In fact, it was established at hearing that Morgan Keegan portrayed these funds as safe, conservative and appropriate for clients with an investment objective of capital preservation. The funds were anything but safe and secure.”