MEMPHIS (CN) – In another spinoff of the subprime mortgage fiasco, a federal class-action complaint accuses Morgan Keegan & Co., Regions Financial Corp. and others, including PriceWaterhouseCoopers, of defrauding investors by misrepresenting and failing to disclose information about Regions Morgan bond funds that lost 50% or more of their value this year.
The net asset value of the Regions Morgan Keegan Select High Income Fund sank by 61% this year, from $10.14 to $6.23 per share; and the net asset value of the RMK Select Intermediate Fund sank by more than 43% this year, from $9.93 to $5.07, the suit states.
Plaintiffs claim the bond funds’ performance is astronomically more wretched than comparable funds, and that defendants misrepresented the investments at every step along the way.
Here are the defendants: Morgan Asset Management, Morgan Keegan & Co., Regions Financial Corp., MK Holding Inc., Allen B. Morgan Jr., J. Alderman, Jack Blair, Albert Johnson, James McFadden, W. Pittman, Mary Stone, Archie Willis III, Brian Sullivan, J. Weller, Charles Maxwell, Michele Wood, James Kelsoe Jr., David Tannehill, and PricewaterhouseCoopers LLP.
Lead counsel for plaintiffs is Lockridge Grindal Nauen of Minneapolis. See the 125-page complaint.