Subprime mortgage scandal continues to make Miami headlines

Although several years have passed since the 2007 housing crisis and subsequent economic recession, litigation involving subprime mortgages is still making news in Miami and around the country. The latest story involves former directors of mutual funds offered by Regions Morgan Keegan.

According to charges brought by the U.S. Securities and Exchange Commission, the directors shirked their fiduciary duties by delegating certain responsibilities to fund managers. Under applicable securities laws, mutual fund directors are required to set values for subprime mortgage securities when the market price is unavailable. However, SEC officials claimed that the Morgan Keegan directors allowed fund managers to set those values.

Although delegating a work responsibility may seem like a small offense, that amount lost by investors in the mutual funds was anything but small, totaling around $1.5 billion. In addition, any alleged violation of a federal security law might result in serious consequences.

SEC officials recently agreed to settle its securities fraud charges in exchange for a payment of $200 million. Unfortunately, other investors in subprime mortgages or asset-backed securities may not have fared as well. Such investors may not have fully understood their investment within the context of the subprime mortgage market, despite the fiduciary duty of brokers and firms to inform investors. As a result, investors may not have fully understood the risks presented by their investment.

However, this story illustrates that securities fraud litigation continues to hold financial professionals accountable for their misrepresentations or other negligent investment practices. A securities fraud attorney might help explain the options available to investors who lost everything with the subprime mortgage market collapsed.

Source: miamiherald.com, “8 ex-mutual fund directors settle SEC claims,” Marcy Gordon, June 13, 2013

Share This Story

Share your experience with investment fraud, and contribute to a community dedicated to protection and empowerment. Together, we can unveil strategies, share insights, and build a shield against financial deceit.

Let’s Discuss Your Case Today

When fighting for your rights, you may go up against some dangerous enemies. You want an attorney flying by your side to help navigate you through the twists and turns of the legal system. 

I Want To...
No Recovery, No Fees (888) 578-6255

Subscribe to our email!

Subscribe to our email!

Subscribe to our email!

uploadmagnifiercross linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram