Morgan Keegan Mutual Funds
Investors in several Regions Morgan Keegan mutual funds have suffered tremendous losses as a result of the funds large investments in illiquid securities linked to the subprime mortgage market. Two widely held closed-end mutual funds, the Morgan Keegan Select Intermediate Bond Fund (RIBCX) and the Morgan Keegan Select High Income Fund (MKHIX), have lost 50% to 60% of their value over the last 12 months. Four Morgan Keegan closed-end mutual funds, RMK High Income Fund (RMH), RMK Strategic Income Fund (RSF), MK Multi Sector High Income Fund (RHY) and RMK Advantage Income Fund (RMA), have lost between 50% and 75% of their values.
The large losses in all of these funds can be linked directly to the funds large investments in illiquid securities linked to subprime mortgages. These securities are known as Collateralized Bond Obligations (CBOs), Collateralized Loan Obligations (CLOs), and Collateralized Mortgage Obligations (CMOs). In mid-2007, the subprime mortgage market was crushed as homeowners began to default, leading to a record number of foreclosures. As the crisis began to grow, these securities lost most of their values and became completely illiquid.
By making investments in these types of risky investments, the fund managers at Morgan Keegan misled investors by violating the terms stated in the prospectuses of these funds. A prospectus dated June 30, 2007 states "Opportunity for High Current Income - The relatively conservative credit posture of the Fund reflects our goal of higher yields without excessive credit risk.” Morgan Keegan sold these funds to investors looking for conservative investments. Instead these investors took on more risk than most investors in Internet or biotechnology stocks.
Legal Rights for Morgan Keegan Mutal Fund Investors
Morgan Keegan misled investors when they told them that these funds would avoid excessive risk, and then went out and purchased some of the most risky securities the market has to offer. If you lost money investing in any of these funds you may be entitled to compensation. Contact Mark & Associates, P.C. today for a free case consultation by submitting the form on the right side of this page or by calling 1-866-50-RIGHTS (1-866-507-4448).
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