Four states, the Securities and Exchange Commission and the Financial Industry Regulatory Authority have filed administrative actions against Morgan Keegan & Co., alleging the company cost investors over $2 billion through fraudulent and reckless business practices.
Officials in South Carolina, Mississippi, Alabama and Kentucky along with the SEC alleged the Memphis, Tenn.-based company fraudulently overstated the value of funds backed by subprime mortgages.
FINRA's complaint also focuses on Morgan Keegan using false and misleading sales material in its marketing.
The agencies and states are seeking financial restitution for investors. Along with fines, Morgan Keegan could face the revocation of its securities license and lose the ability to sell securities.
Morgan Keegan operates eight branches in South Carolina, including one inside the Regions Bank branch on Gervais Street, according to the company's Web site.