SEC Charges Morgan Keegan for Fraudulent Marketing and Sales of Auction Rate Securities

On July 21, 2009, the Securities and Exchange Commission (SEC) charged Morgan Keegan & Company. In its Complaint, the SEC seeks an injunction for violation of the federal securities laws, as well as equitable relief for Morgan Keegan investors. Included in this equitable relief is a request for a court order requiring Morgan Keegan to repurchase illiquid ARS from its customers. More about the SEC’s case, including a link to the Commission’s Litigation Release and Complaint can be found here.

The SEC’s Complaint alleges that Morgan Keegan misled thousands of investors about the liquidity risks related to auction rate securities (ARS). This is another example of the massive fraud related to Auction Rate Securities that was perpetrated by financial services firms across the country. To date, several firms, including UBS, Wachovia, TD Ameritrade, Fidelity, and Stifel Nicolaus have entered into settlements with federal and/or state securities regulators. Some of these settlements have broader relief for investors, while others have left many investors still holding onto these illiquid investments.

If you were sold Auction Rate Securities and your positions have not been redeemed or repurchased, you should contact an attorney to discuss your rights. The Kueser Law Firm represents investors in securities arbitration and litigation. Feel free to contact us if you have any questions or would like additional information.

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Article by Jason M. Kueser

Jason M. Kueser has spent his legal career representing individuals, groups, and companies in litigation and arbitration. In addition, he has, and continues to represent clients in class action litigation. Jason is currently admitted to the Missouri Bar, the Kansas Bar, as well as the U.S. District Court for the Western District of Missouri, the U.S. District Court for the District of Kansas, and the Eighth Circuit Court of Appeals. In addition, he is a member of the American Bar Association, the Kansas City Metropolitan Bar Association, and PIABA (Private Investors Arbitration Bar Association). He currently serves on the editorial board of the PIABA Bar Journal. Jason has also written articles that have been published in law reviews, industry legal publications, and newspapers.
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