The SEC approved the Modified Plan of Distribution on August 16, 2013. A copy of the Modified Plan of Distribution can be downloaded on the Morgan Keegan Fair Fund page of this website. For information on how to file a claim, please review the information on the Claims Process page of this site.
Please note that the claims filing deadline for participation in the Morgan Keegan Fair Fund passed on January 11, 2014 and new claims are no longer being accepted.
Please note that the claims filing deadline for participation in the States’ Fund passed on June 16, 2012, and new claims are no longer being accepted.
The Settlement is centered around the following Morgan Keegan mutual funds:
FORMER FUND NAMES
NOW KNOWN AS
Regions Morgan Keegan Advantage Income Fund
(“Advantage Income Fund”)
Helios Advantage Income Fund, Inc.
Regions Morgan Keegan High Income Fund
(“High Income Fund”)
Helios High Income Fund, Inc.
Regions Morgan Keegan Multi-Sector High Income Fund
(“Multi-Sector High Income Fund”)
Helios Multi-Sector High Income Fund, Inc.
Regions Morgan Keegan Strategic Income Fund
(“Strategic Income Fund”)
Helios Strategic Income Fund, Inc.
Regions Morgan Keegan Select High Income Fund
(“Select High Income Fund”)
Helios Select Fund, Inc.
Regions Morgan Keegan Select Intermediate Bond Fund
(“Intermediate Bond Fund”)
Regions Morgan Keegan Select Short Term Bond Fund
(“Short Term Bond Fund”)
The following are parties to the Settlement: Joseph P. Borg, Director of the Alabama Securities Commission; Charles A. Vice, Commissioner of Kentucky Department of Financial Institutions; Delbert Hosemann, Mississippi Secretary of State; Alan Wilson, Attorney General & Securities Commissioner, South Carolina; and Julie Mix McPeak, Commissioner of the Department of Commerce and Insurance, Tennessee; along with the SEC; and Brad Bennett, Executive Vice President and Enforcement Director for the Financial Industry Regulatory Authority (FINRA). These actions are a direct result of intensive multi-state, federal, and self-regulatory organization (SRO) investigations. The States’ task force was led by Alabama, Kentucky, Mississippi, South Carolina, and Tennessee in cooperation with state securities regulators from Arkansas, Florida, Georgia, Illinois, Louisiana, Missouri, North Carolina, and Texas.
1. MKC, MAM, James C. Kelsoe, Jr. and Joseph Thompson Weller were ordered to pay a total of $200.3 million. Of this, $100.3 million was used to establish a “Morgan Keegan Fair Fund,” and $100 million was used to establish a “States’ Fund” both for the benefit of investors. All costs, expenses, and charges associated with the Morgan Keegan Fair Fund and the States’ Fund management and distributions will be paid by MKC.
2. MKC and MAM are prohibited from creating, offering or selling any proprietary funds for a period of two years.
3. In addition to regular audits and examinations, state regulatory authorities may conduct additional audits or examinations of the offices and branch offices of MKC and MAM; and, for the next two years, appropriate costs associated with these special audits or examinations will be paid by MKC/MAM.
4. If MKC/MAM forms and sells any proprietary investment products before January 1, 2016, the firms are required to retain an independent auditor, at their expense for three years. This auditor must be acceptable to a representative selected by state securities regulators from Alabama, Kentucky, Mississippi, South Carolina and Tennessee, as well as the SEC.
5. For the next three years, MKC and MAM will provide special mandatory training to all firm registered agents and investment adviser representatives that must be comprehensive for each of the products and offerings sold or recommended to clients. Further, MKC and MAM must also conduct training on suitability and risks of investments. MKC and MAM shall develop and implement course evaluations in order to assess the effectiveness of the training.
6. MKC and MAM are prohibited from having one person simultaneously hold the positions of general counsel and chief compliance officer.
7. State securities regulators will continue the cases and charges against Brian B. Sullivan, Gary S. Stringer, and Michele F. Wood, who were named in the States’ proceedings and who have not entered into the consent orders.
8. MKC and MAM must fully cooperate in current and future administrative proceedings against Sullivan, Stringer, or Wood.
9. James Kelsoe, the fund manager named in the states’ and SEC actions, settled charges with the states and was ordered to pay a total of $500,000.00 ($250,000.00 to the states and $250,000.00 to the SEC). Furthermore, Kelsoe agreed to the revocation of all of his existing registrations and/or licenses and to an order of permanent bar from involvement in the securities industry. Kelsoe cannot serve as an officer, director, or manager of, or issuer of interests in a mutual fund, money market fund, pooled investments or similar securities and investment vehicles that are publicly offered or sold.
The States’ Fund Distribution Plan Notice to Morgan Keegan Investors is available on the States' Fund page of this website.
If you have questions, you may call the Morgan Keegan Settlement Help Line at 1-888-208-9083 or email info@MorganKeeganSettlement.com.