WASHINGTON, A Financial Industry Regulatory Authority settlement panel ordered Memphis-based Morgan Keegan & Corp. To pay a Birmingham financier $1.95 million for misrepresenting the Jefferson County, Ala, sewer bonds he bought were safe, liquid and tax free investments. I believe Morgan need a securities arbitration attorney to help his payment.
The bonds were actually auction-rate securities and the ARS market collapsed and froze in the financial disaster, leaving backers holding the instruments they had bought.
In an order issued Feb. 17, the panel awarded the payment to William W. Featheringill, a Birmingham investor and investor. The amount of damages equals the amount of ARS Featheringill was left holding.
We got 100 cents on the buck. The whole amount, said J. Michael Rediker, an attorney with Haskell Slaughter Young & Rediker LLC, which represented Featheringill.
The bonds were actually auction-rate securities and the ARS market collapsed and froze in the financial disaster, leaving backers holding the instruments they had bought.
In an order issued Feb. 17, the panel awarded the payment to William W. Featheringill, a Birmingham investor and investor. The amount of damages equals the amount of ARS Featheringill was left holding.
We got 100 cents on the buck. The whole amount, said J. Michael Rediker, an attorney with Haskell Slaughter Young & Rediker LLC, which represented Featheringill.
Featheringill moaned to FINRA in 2010 that staff at AmSouth Investment Services Incorporated, which became a part of Morgan Keegan in 2007, misrepresented the risks linked with making an investment in auction-rate securities. Featheringill purchased $3.5 million worth of the sewer bonds in 2005 from AmSouth. That company was acquired by Morgan Keegans parent, Regions Financial Corp.
Morgan Keegan said Tues. that it is considering an appeal of the choice.
Featheringill said he was inexperienced in making an investment in bonds and bought the securities on the guidance of AmSouth staff, who warranted him the bonds were safe and that he could get his cash each 35 days if he needed to.
Featheringill later sold $1.5 million of the bonds. His holdings totaled $1.95 million in 2010 when he filed the complaint against Morgan Keegan.
Auction-rate instruments are long-term bonds with rates that reset continually at auctions. ARS are similar to short term paper because investors can hold them for brief periods.
But if the auctions fail, as they did when the monetary disaster was unfolding in 2008 and dealers stopped supporting the auctions, investors may be stuck holding them indefinitely.
Unfortunately, the sewer bonds were, in risk and suitability terms, the exact opposite of what they were represented to be, related Featheringills complaint. This sort of investment auction rate securities had and still has enormous possibility of illiquidity and price depreciation.
Rediker said staffers at Morgan Keegan were conscious of issues with ARS in 2007, but failed to tell investors.
They knew in the fall of 2007 that there was dreadful chance of failure, he said.
The principal amount under debate in this case may appear relatively tiny, but the securities guidelines concerned were giant. They are going to ruling the fundamental relationship between broker-dealers and their clientele, expounded Joseph S. Fichera, Manager of Saber Partners LLC, who served as an expert witness for Featheringill. Whileeach case is fact-specific, the large number and assortment of ARS cases, even four years after the market dislocation, sugge
Morgan Keegan said Tues. that it is considering an appeal of the choice.
Featheringill said he was inexperienced in making an investment in bonds and bought the securities on the guidance of AmSouth staff, who warranted him the bonds were safe and that he could get his cash each 35 days if he needed to.
Featheringill later sold $1.5 million of the bonds. His holdings totaled $1.95 million in 2010 when he filed the complaint against Morgan Keegan.
Auction-rate instruments are long-term bonds with rates that reset continually at auctions. ARS are similar to short term paper because investors can hold them for brief periods.
But if the auctions fail, as they did when the monetary disaster was unfolding in 2008 and dealers stopped supporting the auctions, investors may be stuck holding them indefinitely.
Unfortunately, the sewer bonds were, in risk and suitability terms, the exact opposite of what they were represented to be, related Featheringills complaint. This sort of investment auction rate securities had and still has enormous possibility of illiquidity and price depreciation.
Rediker said staffers at Morgan Keegan were conscious of issues with ARS in 2007, but failed to tell investors.
They knew in the fall of 2007 that there was dreadful chance of failure, he said.
The principal amount under debate in this case may appear relatively tiny, but the securities guidelines concerned were giant. They are going to ruling the fundamental relationship between broker-dealers and their clientele, expounded Joseph S. Fichera, Manager of Saber Partners LLC, who served as an expert witness for Featheringill. Whileeach case is fact-specific, the large number and assortment of ARS cases, even four years after the market dislocation, sugge
But if the auctions fail, as they did when the monetary disaster was unfolding in 2008 and dealers stopped supporting the auctions, investors may be stuck holding them indefinitely.
Unfortunately, the sewer bonds were, in risk and suitability terms, the exact opposite of what they were represented to be, related Featheringills complaint. This sort of investment auction rate securities had and still has enormous possibility of illiquidity and price depreciation.
Rediker said staffers at Morgan Keegan were conscious of issues with ARS in 2007, but failed to tell investors.
They knew in the fall of 2007 that there was dreadful chance of failure, he said.
The principal amount under debate in this case may appear relatively tiny, but the securities guidelines concerned were giant. They are going to ruling the fundamental relationship between broker-dealers and their clientele, expounded Joseph S. Fichera, Manager of Saber Partners LLC, who served as an expert witness for Featheringill. Whileeach case is fact-specific, the large number and assortment of ARS cases, even four years after the market dislocation, suggests there were elemental issues in this market.
While the FINRA panel gave Featheringill all of the damages that he asked for, it took no action on the his requirement for $5.85 million in punishing damages.
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Unfortunately, the sewer bonds were, in risk and suitability terms, the exact opposite of what they were represented to be, related Featheringills complaint. This sort of investment auction rate securities had and still has enormous possibility of illiquidity and price depreciation.
Rediker said staffers at Morgan Keegan were conscious of issues with ARS in 2007, but failed to tell investors.
They knew in the fall of 2007 that there was dreadful chance of failure, he said.
The principal amount under debate in this case may appear relatively tiny, but the securities guidelines concerned were giant. They are going to ruling the fundamental relationship between broker-dealers and their clientele, expounded Joseph S. Fichera, Manager of Saber Partners LLC, who served as an expert witness for Featheringill. Whileeach case is fact-specific, the large number and assortment of ARS cases, even four years after the market dislocation, suggests there were elemental issues in this market.
While the FINRA panel gave Featheringill all of the damages that he asked for, it took no action on the his requirement for $5.85 million in punishing damages.
About the Author:
These article is all about finra arbitration and finra lawyers . The writer is Daniela Bosh.