Morgan Keegan Funds Duped Investors On ABS, Suits Allege

Law360, New York (October 25, 2013, 6:09 PM EDT) -- Regions Financial Corp. was hit with separate lawsuits in Tennessee federal court Friday alleging the firm’s former Morgan Keegan income funds stocked up on risky asset-backed securities for years without telling investors.

The suits allege several Regions Morgan Keegan income funds, or RMK funds, misled investors between 2002 and 2008 by concealing a strategy that called for heavy investments in structured asset-backed securities — particularly the lowest “tranches” of those securities, which carried the greatest risk. The funds also violated U.S. Securities and Exchange Commission rules...
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