Investors in two Morgan Keegan Asset Management bond mutual funds have filed a federal lawsuit with the U.S. District Court in the western district of Tennessee seeking class-action status and a jury trial, and many in the industry are expecting additional suits in the coming months, The Wall Street Journal reports. Already, State Street is facing a similar lawsuit of its own.

The Regions Morgan Keegan Select Intermediate Bond Fund is down 47% so far this year, and the Morgan Keegan Select High Income Fund has fared even worse, losing 56%.

The lawsuit accuses the company of failing to disclose the risks of the illiquidity of some of the funds’ holdings and disagrees with the way they were valued.

The lawsuit names 20 parties, including Morgan Keegan’s parent, Regions Financial, auditor PricewaterhouseCoopers, Portfolio Manager James Kelsoe, other executives of the firm, as well as members of the board.

For the time being, Morgan Properties, a Morgan Keegan subsidiary, has been acquiring assets of the funds, $55 million from the Select High Income and $30 million from the Select Intermediate Bond Fund in the third quarter alone.

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