ABOUT BROKER FRAUD BLOG

Victory at Last for Non-Profit in Securities Lawsuit

Last July the Financial Industry Regulatory Authority (FINRA) awarded the non-profit religious book distributor United Prison Ministries $220,000 plus interest for losses suffered after investing in Morgan Keegan bond funds.

Finally, they will getting the funds they deserve after an Alabama judge ruled in their favor by denying Morgan Keegan's request to overturn the award.

Morgan Keegan argued that one of the arbitrators that had decided the case was biased toward the plaintiff; however, Alabama state court Judge Nicole Gordon Still disagreed and confirmed the ruling after deducting $20,000 that had been awarded for double expert fees.

United Prison Ministries was represented in the lawsuit by securities attorney, Debra Hayes of the Hayes Law Firm in Houston. 

Hayes is happy with court's ruling and glad that she will finally be able to return the lost funds back to her client "despite Morgan Keegan’s every attempt to delay payment to this worthwhile charity."

The Hayes Law Firm focuses their practice on helping individuals and business that have lost investment funds due to investment fraud and other shady dealings of investment firms and brokers.

Former Mortgage Exec Accused of Multi-Billion Dollar Scam

Yesterday federal officials announced that the former chairman of one of the nation’s largest mortgage firms, Taylor, Bean, & Whitaker had been indicted for his alleged role in a multi-billion dollar fraud scheme.

Federal officials claim that Lee Bentley Farkas committed $1.9 billion fraud against investors and the federal government. The scam allegedly directly led to the demise of not only Farkas’ firm but Colonial Bank of Alabama as well.

According to the Washington Post federal officials described an even larger scheme that caused such collateral damage to government agencies that it has only begun to be tallied.

Taylor Bean allegedly hid the true nature of the turmoil and allowed the firm to be fraudulently meet conditions that lead to them becoming one of the largest business partners of the Federal Housing Administration and Ginnie Mae.

Court documents allege that Farkas tried to cover up the scheme and used over $20 million in investor funds for personal expenses, including private jets and properties in Florida.

Farkas is also accused of trying to defraud the Treasury Department of $553 million in a scheme he and other conspirators called “Project Squirrel.”

If convicted Farkas will likely face a life sentence.

Federal authorities said the investigation will continue, which probably means that future arrest will probably be made in the coming months.

An attorney for Farkas, Anthony Cochran, said his client will plead not guilty and will "vigorously defend against the charges. He looks forward to having his day in court to clear his name."

Morgan Keegan Ordered to Pay Arbitration Award to Non-Profit Religious Organization

In a rare ruling an Alabama state court judge affirmed an amended version of an Award against Morgan Keegan & Company. Over a year ago a Financial Industry Regulatory Authority (FINRA) arbitration panel awarded Hayes Law Firm client and non-profit organization, United Prison Ministries, $220,000 plus interest for the losses suffered in Morgan Keegan bond funds.

United Prison Ministries was founded in 1980 and its charity work primarily includes reaching out to individuals who have been incarcerated. To date they have provided over 70 million Bible lessons, life changing books, and Bibles to male and female prisoners throughout the world.

Morgan Keegan sought to vacate the Award; however, Judge Nicole Gordon Still disagreed with the financial institution on two of their three reasons to vacate. In the end the award was amended by Judge Still to remove a double recovery of expert fees leaving a remaining award of $200,000 plus interest.

“Despite Morgan Keegan’s every attempt to delay payment to this worthwhile charity, justice did prevail and my client can now get back to the business of distributing bibles to inmates,” said our very own Debra Brewer Hayes of The Hayes Law Firm, P.C. in Houston,TX, who represented United Prison Ministries.

Morgan Keegan has been accused of engaging in a massive scheme to defraud investors.The Morgan Keegan bond funds that are reportedly the subject of hundreds of investor arbitrations include the following:

• Regions Morgan Keegan Select High Income-A, (Sym: MKHIX)
• Regions Morgan Keegan Select High Income-C, (Sym: RHICX)
• Regions Morgan Keegan Select High Income-I, (Sym: RHIIX)
• RMK High Income Fund, (Sym: RMH)
• RMK Strategic Income Fund, (Sym: RSF)
• Regions Morgan Keegan Select Intermediate Bond Fund-A, (Sym: MKIBX)
• Regions Morgan Keegan Select Intermediate Bond Fund-C, (Sym: RIBCX)
• Regions Morgan Keegan Select Intermediate Bond Fund-I, (Sym: RIBIX)
• RMK Multi-Sector High Income, (Sym: RHY)
• RMK Advantage Income, (Sym: RMA)

If you have been defrauded by Morgan Keegan and have lost your investment due to mismanagement, we can help.

Our team of experienced investment fraud attorneys is dedicated to helping those who have lost money in the stock market. Contact us today for free consultation with an investment fraud lawyer.

"Star Broker" Kenneth Star had a History of Fraud

Kenneth Starr, former broker to the stars, was found hiding in closet when police arrested him two weeks ago. Starr is accused of orchestrating and running a $30 million Ponzi Scheme in which he used investor money to furnish his lavish lifestyle.

According to a New York Times story this is not the first time that Starr has been accused of fraud. In 2002 Starr was named in a lawsuit filed by Sylvester Stallone which accused Starr of mismanaging a investment for now nearly defunct Planet Hollywood.

Starr was also accused of fraud by former actress Joan A. Stanton, and was fired by Lauren Bacall, Diane Sawyer, and the widow of legendary actor Humphrey Bogart.

Starr had made a fine life taking advantage of celebrities and using their money to fund his lavish lifestyle, but Starr will now most likely be trading the $7.5 million Upper East Side condo, for an extended stint in 6 x 8 jail cell.