Jonathan Evans Files $463,700 Arbitration Claim Against Morgan Keegan and Andrew Harris on Behalf of Two Retired Teachers

STUDIO CITY, Calif., Jan. 25 /PRNewswire/ -- Jonathan Evans filed a $463,700 arbitration claim against Morgan Keegan and its registered representative, Andrew Harris, today for making recommendations which placed his retired clients in the middle of the sub-prime meltdown. The claim alleges that Harris advised his clients to purchase a large number of shares in four Morgan Keegan funds all of which were focused in sub-prime markets. As a result of his recommendations, the claim alleges these retirees lost a large portion of their retirement money.

Evans' clients are a husband and wife, both retired school teachers who reside in La Quinta, California. "They scrimped and saved their entire lives and successfully built a nest-egg for their retirement. They had settled into a wonderful retirement and were enjoying the fruits of their long-term savings," described Evans. "Then, Morgan Keegan and Harris interrupted their lives with these four terrible mutual funds."

The funds at issue are the Regions Morgan Keegan Select Intermediate Bond Fund (RIBCX), and three closed-end funds RMK Multi Sector High Income Fund (RHY); RMK Strategic Income Fund (RSF); and RMK Advantage Income Fund (RMA). During the 2007 calendar year, these funds suffered significant losses in their value.

         2007 Calendar Year Losses for Morgan Keegan Funds
             Fund                             2007 Losses
             RIBCX                           -50.54%
             RHY                             -65.09%
             RSF                             -66.92%
             RMA                             -66.68%

"Fortunately, my clients pulled their money out of the funds in October, so they did not take the full brunt of the market meltdown," said Evans. He added, "Even getting out then, they took tremendous losses. These losses were so big that they changed the quality of my clients' lives."

The Statement of Claim includes allegations of fraud, unsuitability, negligence, violation of securities laws and elder abuse.

The Claim includes an allegation that the clients tried to order the sale of the investments, however, Harris refused to sell saying that Morgan Keegan did not want the funds' prices to fall any further, and a sale of their position would further depress the prices. "This is outright market manipulation, fraud, and breach of the fiduciary duty owed to the clients," Evans explained. "The brokerage firm and broker have to put the interest of their clients ahead of their own. Morgan Keegan clearly failed to do so. Rather, they tried to artificially maintain the funds' share prices by preventing their clients from selling." He added, "I will ask that as part of its Award, the Arbitration Panel refer the matter to FINRA for further disciplinary investigation."

"Morgan Keegan and its broker owed a fiduciary duty to the clients to be familiar with the investments they recommended. If the broker could not figure out the investment he should not have recommended it." Evans went on to add that in California, every broker-client relationship is a fiduciary one, with the broker owing a higher duty of care to its clients than in other states. "California provides more protection to its investors than many other states. The law was written to prevent abuses such as those in this case."

According to Evans, "one of the most egregious abuses I saw was that all four funds had almost identical concentrations of sub-prime holdings. When the sub-prime market crashed, the values of all four funds went with it. The broker over-concentrated his clients' holdings in this toxic waste of debt instruments. In the first day of broker-school, a broker learns he has a sacrosanct duty to diversify his client's portfolio. Harris miserably failed in protecting his clients from concentration losses."

Practicing law since 1975, Mr. Evans specializes in securities arbitration matters, which currently represent 95% of his practice. He limits his representation to public customers. Mr. Evans has litigated hundreds of securities arbitration claims, and tried more than fifty (50) cases to a conclusion at the FINRA. He has also mediated many more, and has proudly represented hundreds of other public investors in their disputes, many of which resulted in favorable settlements.

Contact: Michael Edmiston 213-626-1881

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