September 29, 2016 2:45 PM ET

Capital Markets

Company Overview of Morgan Keegan & Company, Inc.

Company Overview

Morgan Keegan & Company, Inc. engages in wealth management and capital market businesses. The company offers investment products and services, and investment planning and advice. It provides securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance products to individual clients. The company also offers equity research covering approximately 1,000 companies in 8 industries; securities brokerage, trading, and research services to institutions, primarily on sale of the U.S. and Canadian equities and fixed income products; and manages and participates in underwritings, merger and acquisition services, and public finance activities. In addi...

Morgan Keegan Tower

50 North Front Street

Memphis, TN 38103

United States

Phone:

901-524-4100

Fax:

901-524-4197

Key Executives for Morgan Keegan & Company, Inc.

President and Chief Operating Officer
Age: 51
Chief Financial Officer, Secretary and Treasurer
Age: 61
Executive Managing Director and President of Equity Capital Markets Division
President of Private Client Group Division
Managing Director and Co-Head of Mergers Acquisitions & Divestitures
Compensation as of Fiscal Year 2016.

Morgan Keegan & Company, Inc. Key Developments

Missouri Regulator Settles with Morgan Keegan & Co. Inc. in Mamtek Case

Morgan Keegan & Co. Inc. announced that it will pay $850,000 to settle securities fraud charges brought by Missouri Secretary of State Jason Kander over the firm's underwriting of $39 million of municipal bonds for a failed artificial sweetener plant. The office's Securities Division filed a consent order on February 8, 2016 in state court resolving the civil enforcement case first filed in 2013, which accused the firm of omitting material facts about the project being constructed by the now defunct Mamtek US Inc., in violation of state securities laws. In the agreement, the firm does not deny or admit to any wrongdoing in connection with the bonds that were sold by the Moberly Industrial Development Authority. Missouri investors, who would have stood to benefit from the state case, have recouped their investment primarily through the settlement of various lawsuits brought against Morgan Keegan and other financial firms. Kander's office said its settlement is focused on averting a recurrence in a future bond issue. As part of the order, Morgan Keegan, whose underwriting business became a part of Raymond James Financial Group in 2012, must hire a consultant to review its municipal bond underwriting procedures and will implement any suggested changes by Kander's office. The changes would apply to Raymond James & Associates Inc.'s municipal bond department, according to the order. With the resolution of the lawsuits and the Missouri enforcement action, only bankruptcy trustee action remains ongoing. The authority sold the bonds, backed by the city's appropriation pledge, in 2010. The project also qualified for state tax credits, although the credits were never received. The complaint charged that the firm failed to adequately investigate the feasibility of Mamtek's business plan, misled investors about investigation findings, and failed to inform them of significant risks of the bonds. The lawsuit alleged that Morgan Keegan misrepresented to investors that their bonds were secured by valid Mamtek patents, when in reality, Mamtek did not have any patents.

Settlements End Bondholder Suits over Failed Sucralose Project Against Morgan Keegan & Co. LLC and Armstrong Teasdale

Investors holding about $27 million of bonds issued for a failed Missouri artificial sugar plant have reached settlements with the financial firms they sued for negligence and fraud. The parties are expected in the coming weeks to file a motion to dismiss their pending lawsuits. Kronawitter of Horn Aylward & Brandy LC, which is representing the plaintiffs in three cases filed by investors in Missouri state court. All three named the underwriter of the 2010 bonds, the former Morgan Keegan & Co. LLC, as a defendant. The settlements resolve the claims of 20 institutional investors represented by the firm. The settlements follow the recent resolution of a separate federal class action brought by other investors in the bonds issued to finance a sucralose factory in Moberly, Mo. That case was settled for $8.25 million. Terms of that settlement were disclosed because of its status as a class action. The new settlement announcement came with one of the lawsuits -- led by Shelter Insurance and involving a par value of $15 million of bonds - headed for a November 30 trial date in Cole County Circuit Court at Jefferson City. The Shelter case also named underwriter's legal counsel Armstrong Teasdale as a defendant. Bondholders also added Raymond James Financial Inc. which acquired Morgan Keegan in 2012, as a defendant. A second case involving about $2 million of bonds filed in Jackson County, home of Kansas City, was moving toward a January trial date and one in St. Louis County involving about $10 million of bonds, was set for trial in April. In the federal class action, the distribution of about $5.2 million to the class holding about $6 million represented a roughly 86 % recovery rate, according to attorney J. Timothy Francis of Francis Law LLC, one of the firms representing bondholders in that case. U.S. District Court Judge Nanette Laughrey last month entered an order approving the settlement. Kronawitter declined to comment on whether the terms of the new settlements were comparable, citing the confidentiality agreement. Resolution of the lawsuits leaves only ongoing bankruptcy trustee action and a state-filed enforcement still pending that could result in additional payouts to bondholders. The Moberly Industrial Development Authority sold the bonds, backed by the city's appropriation pledge, in 2010. The project also qualified for state tax credits, although the credits were never received. Mamtek, which billed itself as a subsidiary of a Chinese firm that makes sucralose, defaulted in August 2011 on a payment to Moberly needed for debt service. Moberly refused to honor its pledge and the city lost its investment grade rating. Mamtek US then abandoned the half-built factory. Creditors forced the company into bankruptcy and the plant's assets have since been sold off to benefit creditors. Shelter's lawsuit and others filed by bondholders accused Morgan Keegan of securities violations for allegedly misleading potential nvestors about the viability of the plant and city pledge. The investors accused the firm of fraud and fraud by silence and negligent misrepresentation. The lawsuit also accused Morgan Keegan of misleading investors about the ability of Moberly to cover payments.

Morgan Keegan & Co. and Armstrong Teasdale to Pay Total of $8.25 Million Class Action in the Settlement

Morgan Keegan & Co. and general counsel Armstrong Teasdale will pay a total of $8.25 million in the settlement. The settlement was previously announced, but not the financial terms. About $5.2 million will eventually be distributed to investors after legal and other fees are paid, according to a March 11, 2015 filing with the court that seeks preliminary approval of the settlement, its plan of allocation, and the notice to bondholders who will be asked to accept or reject the settlement. Investors accused the firms of wrongdoing in connection with their roles in the sale of $39 million of defaulted bonds for the failed sucralose factory. The failed plant's project head, Bruce Cole, who is serving a prison term in connection with his role, was also named as a defendant. The jury was seated for the trial before U.S. District Court Judge Nanette K. Laughrey at the federal courthouse in Jefferson City when the settlement was announced in mid-January. The terms were not disclosed at the time as final details were being laid out in a proposed order that would allow for information to be distributed to investors who participated in the class. The agreement settles all claims of the lawsuit. Counsel for the class will receive about 33% of the settlement and some additional expenses if the pact wins final approval. Morgan Keegan was also charged with negligence, a charge not leveled at Armstrong Teasdale. The litigation accused Morgan Keegan of making false statements by email and in conversations with potential buyers and argued that if the firm and Armstrong Teasdale had conducted proper due diligence they would have discovered misrepresentations made by Mamtek US about its Chinese operations.

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