Sonn|Erez Wins Another 100 Cents on the Dollar Award Against Morgan Keegan

Sonn Law Group represented Scott and Tanya Stephens in a FINRA arbitration proceeding against Morgan Keegan & Co., Inc., in which the Arbitration Panel ordered Morgan Keegan to pay the Stephens family $290,999.00 in damages, plus prejudgment and post-judgment interests, over allegations of fraud and misconduct in the sale of Regions Morgan Keegan Funds (“RMK Funds”). The Stephens family was a customer of Morgan Keegan and its employee, Christopher Crifasi, at the firm’s Lafayette, Louisiana branch.

In the arbitration, the Stephens family asserted that Morgan Keegan and Mr. Crifasi misrepresented (and concealed other material facts) that the RMK Funds were a safe, stable, diversified, and conservative, income producing fund. In reality, the RMK Funds were actually invested in so-called “toxic assets,” namely speculative, highly aggressive securities from the lower/subordinated tranches of asset backed securities. The Stephens family also alleged that the RMK Funds were high risk and as such unsuitable.

When the market crashed, so did the RMK Funds. The losses in the RMK Funds, however, were not the result of a flight-to-quality or a “mortgage meltdown” and decline in value of high yield, mortgage-backed or asset-backed debt. Rather, the losses were the result of an over-concentration of investment in the highest-risk mortgage or asset-backed debt investment, an investment strategy that was fraudulently concealed from investors from the beginning and affirmatively misrepresented until well after losses were incurred, argued the Stephens family.

Morgan Keegan denied all liability and contended that the Stephens family were in fact interested in higher risk investments, that the risks were all disclosed and that they should have immediately sold when the funds declined in value. “We are very pleased that the arbitrators properly applied the law to the overwhelming evidence that the Stephens family were interested in safe investments and that the RMK Funds were unsuitable and not adequately explained to their clients.” says Jeffrey Erez, Esq. the attorney for the Stephens family that tried the case. “Our clients did nothing wrong and followed the inappropriate advice of their financial advisor.” Jeffrey Erez, Esq. added.

Sonn Law Group was successful in recovering 100 cents on the dollar for the Stephens family. Panels do not often award 100% of losses to investors. Sonn Law Group has succeeded in recovering 100 cents on the dollar or more for Morgan Keegan clients burned in the RMK Funds numerous times and has even recovered interest, attorney’s fees and punitive damages against Morgan Keegan.

Sonn Law Group PLC is a nationally leading law firm that represents investors who are the victims of investment fraud or negligence. Sonn Law Group represents individual and institutional investors in a wide variety of investment and securities cases involving fraud, negligence, Ponzi schemes, TICs, structured and principal protected notes, stocks, preferred stocks, bonds, and many other investment products. If you have suffered investment losses, please contact Sonn Law Group at 844-689-5754 or complete our “contact form.”

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