Morgan Keegan Directors and SEC Will Settle Charges

March 26, 2013

The eight former independent directors of the Morgan Keegan mutual funds have agreed to settle with the SEC in connection with a civil enforcement action brought by the SEC. The former directors sat on the boards of five Morgan Keegan mutual funds that incurred significant losses during the financial crisis.


The directors were responsible for the fair valuation of securities that lacked readily available quotations, which they properly delegated to a committee. However, the SEC alleged that the directors did not provide meaningful guidance and did not fully understand the methodologies used by the committee to fair value portfolio securities. In the SEC’s view, the directors made little effort to learn how the valuations were being determined. A hearing on the settlement is scheduled for April 2, 2013.


Categories

Enforcement Actions, Investment Advisers, Investment Companies