The federal and state securities laws make it illegal for a stockbroker, an investment bank or a broker-dealer to make any material misrepresentation, or to omit to state a material fact, in connection with the purchase or sale of a security
To make a misrepresentation simply means to state as fact something that is false or untrue. In layman’s terms, misrepresentation is lying. To make a material omission is to omit or withhold the statement of fact, knowledge of which is necessary to make other statements not misleading. In layman’s terms, omission is not telling you everything you should know.
Morgan Keegan made the following false claims regarding the funds:
- “The relatively conservative credit posture of the fund reflects our goal of higher yields without excessive credit risk.”;
- “The fund provides a higher level of current income than typical money market investments.”;
- “A diversified portfolio of mostly investment-grade debt instruments, with some exposure to below-investment-grade assets.”;
- “The portfolio seeks to maintain a balanced exposure across the investment-grade spectrum.”; and
- “The single best way to reduce the risk of any portfolio is through adequate diversification. The Intermediate portfolio is diversified not only with regard to issuer, but also industry, security type and maturity. Furthermore, the Select Intermediate Bond Fund does not invest in speculative derivatives.”
The dramatic losses in share value were caused by several misrepresentations and omissions made by Morgan Keegan and the brokers who sold the mutual fund portfolios including but not limited to:
- Heavy investment in fairly new types of securities that had not been tested through market cycles;
- Failure of the funds to have previously complied with required disclosure procedures relating to the manner in which the funds’ assets were invested;
- The lack of liquidity in the funds’ portfolios;
- The inherent uncertainty in the estimated value of their assets; and
- The failure to disclose breaches and failures in the conditions in the funds’ portfolios that rendered them highly vulnerable to changes in market conditions.
If you have suffered a financial loss as a result of an investment in the Morgan Keegan bond funds – or other similar bond funds, you may have a claim against Morgan Keegan and the broker who advised you to invest in those funds.
Please email or call the Morgan Keegan fraud lawyers at Burke Harvey & Frankowski, LLC, toll-free at 888-930-9091 today for a free claim evaluation. We can help you recover from this devastating abuse of financial power at the hands of Morgan Keegan.
