Garrett et al v Morgan Keegan - $9.2 million (RMH, RSF, RMA, RHY)
In October 2010, a FINRA arbitration panel in Houston, TX ordered Morgan Keegan to pay $9.2 million in damages including $1.1 million in attorneys' fees and $78,000 in costs. The award was made after a hearing wherein the Claimants alleged Respondents breached contractual and fiduciary duties, failed to suitably invest Claimants' accounts, and failed to supervise Claimants' accounts. "Claimants alleged that the suit arises out of a fraudulent scheme that induced Claimants to invest substantial retirement and trust funds into high risky closed-end mutual funds, managed by Morgan Keegan, that purchased illiquid mortgage-backed loans and collateralized debt obligations." The panel found Morgan Keegan liable. The claims related to Claimants' investments in the RMK High Income Fund (RMH), RMK Strategic Income Fund (RSF), RMK Advantage Income Fund (RMA) and RMK Multi-Sector High Income Fund (RHY). Dr. McCann testified on behalf of the Claimants.