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Morgan Keegan, 2 Employees Hit with Fraud Charges
Hayes Law Firm Client United Prison Ministries International Among Victims
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(April 8, 2010 - Thursday) - According to the Wall Street Journal, SEC officials have accused fund manager James Kelsoe of manipulating the prices of low-quality investment to make the funds appear more attractive to potential investors. The complaint claims that Kelsoe convinced accounting to accept 262 “price adjustments” over the first 7 months of 2007 in order to hide the steep losses being suffered by funds backed by subprime mortgage investments. The SEC says this deceitful tactic cost investors $1 billion in losses.
The Federal Investment Regulatory Authority (FINRA) has filed a separate complaint alleging that the Morgan Keegan misled customers about the risks associated with investing in the bond funds, which cost ill-informed investors well over $1 billion.
At the end of 2005 one the funds in question had out preformed all other high-yield funds in the nation; however, when the bottom dropped out of the housing market the funds began to plummet. Rather than tell investors about the steep losses the funds were suffering Kelsoe chose to hide the losses through often arbitrary price adjustments. By the end of 2008, three of the funds had plunged an average of 59.5%, costing investors billions.
One such victim is Rev. Richard Bland. Bland’s Alabama based United Prison Ministries International, a non-profit organization that distributes free bibles and religious books to prisoners and their families, lost over $200,000 after investing in the allegedly manipulated Morgan Keegan bond funds. UPMI is represented by investment fraud attorney Debra Brewer Hayes of the Hayes Law Firm in Houston.
Hundreds of investors, from large institutions to non-profits, like Rev. Bland’s UPMI through arbitration panels created by FINRA.
If you have lost money by investing in Morgan Keegan’s bond funds the investment fraud attorneys at the Hayes Law Firm can help. Our experienced investment fraud attorneys have helped recover millions for our clients and would like the chance to help you. Contact us today for free consultation with a Morgan Keegan bond fund lawyer.
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