FINRA ruled in favor of an NFL retiree, Jerome Woods of the Kansas City Chiefs, who lost $1.7 million in Morgan Keegan mutual funds, but awarded him only $950,000. Woods is among dozens of investors who have filed lawsuits against the firm after losing 90% of their investments.
In Woods case, FINRA said Morgan Keegan breached his trust and was negligent by investing his money in risky junk bonds.
Morgan Keegan intends to defend the claims, a spokeswoman said. The firm believes its broker acted appropriately given the limited investment options that the clients goals and lifestyles allowed, she said.
As far as the disclosure on risk, unfortunately these funds were on the leading edge of the credit crisis that developed into one of the most serious market and economic declines in the countrys history. Unfortunately, these funds were caught up in that, she added.