March 19, 2009 – Crosby & Higgins LLP Files Arbitration Claim Against Morgan Keegan & Co., Inc. Arising Out of the Sale and Marketing of Auction Rate Securities
March 19, 2009
Crosby & Higgins LLP has filed an arbitration claim with the Midwestern Regional Office of the Financial Industry Regulatory Dispute Resolution Corp. (FINRA-DR) against Morgan Keegan & Co., Inc. on behalf of a client in connection with a claim arising out of the marketing and sales of auction rate securities. As alleged, Morgan Keegan fraudulently sold auction rate securities (“ARS”) to a Dallas based luxury automobile dealership without disclosing the risks of these investments or the extent of its involvement in supporting the illusory auction market for these securities. After the ARS market completely collapsed in February 2008, the ARS that Morgan Keegan had recommended and purchased for the client were rendered completely illiquid and have remained so for over a year. Morgan Keegan has offered a limited redemption to some of its retail customers forsecurities it underwrote prior to the market collapse, however, because the specific securities it sold the client were underwritten by another broker-dealer, Morgan Keegan has refused to redeem them, even though they were deceptively marketed and sold by Morgan Keegan. The arbitration claim seeks substantial compensatory damages together with consequential and punitive damages, as well as attorneys’ fees.