The Financial Industry Regulatory Authority has had to bring in hundreds of additional arbitrators to deal with the approximately 400 securities fraud claims that investors have filed against Regions Financial Corp., the investment banking unit of Morgan Keegan & Co. Investors are seeking to recover $35 million after three of its mutual funds dropped in value by up to 82% when the housing market fell apart. The Region Financial Corp mutual funds contained subprime-related securities, including collateralized debt obligations, low-quality mortgages, and mortgage-backed securities.
Morgan Keegan claims that it notified investors of the risks associated with investing in the mutual funds. Regions says that to date, 79 arbitration cases have been heard. 39 of the cases were dismissed and 114 arbitration claims seeking $24 million were dropped before decisions were reached. The investment firm is putting up a tough fight against the complaints. So far, arbitrators have been awarded $7.6 million.
Because so many investors filed arbitration claims, FINRA has had to contact arbitrators in different parts of the US and ask them to come to the different cities where the hearings on the mutual funds are talking place. The average pool of arbitrators in each city is now approximately 721 persons. This is an increase from its previous average pool of 87 arbitrators.
Stockbroker fraud attorney William Shepherd says that his securities fraud law firm Shepherd Smith Edwards & Kantas LTD LLP is committed to helping investors recover their financial losses related to Regions Financial Corp mutual funds. “Our law firm is handling dozens of claims nationwide regarding these funds, each on an individual basis. Some law firms have grouped claims and are using other methods we believe do not properly serve victims. This has skewed results against investors.” SSEK offers prospective clients a free case evaluation.
Related Web Resources:
Arbitrator Out of Work? Call Finra, The Wall Street Journal, February 5, 2010
FINRA