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Rating:SEC Accuses Morgan Keegan of Fraud Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, April 07, 2010

SEC Accuses Morgan Keegan of Fraud

News summary by MFWire's editors

The SEC on Wednesday brought forth fraud charges against Morgan Keegan & Company, Morgan Asset Management and two employees over the pricing of securities in five closed-end funds.

Commission officials allege that Morgan Keegan did not use reasonable procedures to price the funds' securities and as a result, did not calculate accurate NAVs.

"Despite these failures, Morgan Keegan recklessly published daily NAVs of the Funds which it could not know were accurate and, as distributor of the Fundsí shares, sold shares to investors based on those NAVs," SEC officials stated.

Sought for comment, Morgan Keegan spokesman Eric Bran wrote in an e-mailed statement: "We have always held our obligations to our clients and to regulatory law with the utmost seriousness."

"In that context, we have cooperated fully with the investigations of the SEC, Finra and the states for nearly three years. We are disappointed at the decision by these agencies and the states to bring charges which we believe are meritless and based upon erroneous hindsight analysis. We will vigorously refute these charges."

The five funds at the center of the allegations are:
  • Helios Select Fund, Inc. - formerly known as Morgan Keegan Select Fund Inc.
  • Helios High Income Fund Inc. - formerly known as RMK High Income Inc.
  • Helios Multi-Sector High Income Fund Inc. - formerly known as RMK Multi-Sector High Income Fund Inc.
  • Helios Strategic Income Fund Inc. - formerly known as RMK Strategic Income Fund Inc.
  • Helios Advantage Income Fund Inc. - formerly known as RMK Advantage Income Fund Inc.

    Click here to view the SEC's order.  

    Edited by: InvestmentWires Staff, 


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