Post by Sapphire Capital on Aug 3, 2008 2:56:42 GMT 4
RMK Slapped with Another Lawsuit
By Karla L. Yeh, Markets Media Online
July 31, 2008
Regions Morgan Keegan Trust, a trust company with more than $21 billion in assets, was sued Thursday for failing to disclose investment risks and the illiquidity of certain securities in its open- and closed-end funds.
The class-action claims RMK misled trusts and custodial accounts on the nature of risks bought on as investments in the funds, the illiquidity of certain securities in which the funds invested, the characteristics of illiquid securities, the value of securities and the concentration of investments and asset values of the funds.
Thomason Hendrix Harvey Johnson & Mitchell PLLC and C. Fred Daniels, a representative appointed by the Probate Court of Jefferson County, Ala., filed five separate class action suits on behalf of trusts and custodial accounts, who said the delayed and partial disclosures of the funds' performance led to plummeting prices, which averaged 70 percent losses in value.
RMK has been the target of two lawsuits in the last two months. In June, a Jefferson County, Ala. man named Charles Wilson sued RMK subsidiary Morgan Keegan & Co., JPMorgan Chase & Co. Inc. and 10 other institutions for allegedly making faulty county bond transactions after the county residents' sewer bills increased fourfold.
Some 659,000 Jefferson County residents accumulated $3.2 billion in debt to build a new sewer system over the last 11 years. These bonds, which had adjustable interest rates and were tied to derivatives meant to avoid higher borrowing costs, almost bought the county to bankruptcy. The county has won agreements to postpone making payments to banks holding unwanted bonds to find ways to restructure the sewer debts.
By Karla L. Yeh, Markets Media Online
July 31, 2008
Regions Morgan Keegan Trust, a trust company with more than $21 billion in assets, was sued Thursday for failing to disclose investment risks and the illiquidity of certain securities in its open- and closed-end funds.
The class-action claims RMK misled trusts and custodial accounts on the nature of risks bought on as investments in the funds, the illiquidity of certain securities in which the funds invested, the characteristics of illiquid securities, the value of securities and the concentration of investments and asset values of the funds.
Thomason Hendrix Harvey Johnson & Mitchell PLLC and C. Fred Daniels, a representative appointed by the Probate Court of Jefferson County, Ala., filed five separate class action suits on behalf of trusts and custodial accounts, who said the delayed and partial disclosures of the funds' performance led to plummeting prices, which averaged 70 percent losses in value.
RMK has been the target of two lawsuits in the last two months. In June, a Jefferson County, Ala. man named Charles Wilson sued RMK subsidiary Morgan Keegan & Co., JPMorgan Chase & Co. Inc. and 10 other institutions for allegedly making faulty county bond transactions after the county residents' sewer bills increased fourfold.
Some 659,000 Jefferson County residents accumulated $3.2 billion in debt to build a new sewer system over the last 11 years. These bonds, which had adjustable interest rates and were tied to derivatives meant to avoid higher borrowing costs, almost bought the county to bankruptcy. The county has won agreements to postpone making payments to banks holding unwanted bonds to find ways to restructure the sewer debts.