![Morgan Keegan Faces Mutual Fund Lawsuits](/images/articles2/morgan-keegan-losses-article-4.jpg)
Regions Financial Corp. currently owns Morgan Keegan but put the investment firm on the market. So far, there are some potential buyers but a sale has not gone through. Some experts speculate that the reason no sale has occurred is because of the costly litigation Morgan Keegan faces. Earlier this year, Regions Financial Corp. agreed to a $210 million settlement with regulators over allegations about Morgan Keegan improperly handling subprime mortgage-backed securities. Despite the settlement, Morgan Keegan did not admit to any wrongdoing in the case.
According to reports, so far 331 arbitration cases have either been tried or abandoned. Investors have won approximately $16 million so far, although half the claims against Morgan Keegan were reportedly rejected by arbitrators.
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Morgan Keegan is not the only company to face lawsuits and arbitrations regarding its mutual funds. Walmart and Merrill Lynch recently agreed to pay $13.5 million to settle a lawsuit related to its handling of a 401(k) plan. Specifically, the lawsuit alleged that Walmart offered participants in the 401(k) only mutual fund options that involved high fees. Meanwhile, the lawsuit alleged, Merrill Lynch accepted undisclosed payments from mutual fund companies for including them in the plan.
According to Forbes (12/05/11), the $13.5 million will be used to reduce future 401(k) plan fees.