SHEPHERD SMITH EDWARDS & KANTAS LLP INVESTIGATING CLAIMS INVOLVING SBA RELATED SECURITIES PURCHASED THROUGH MORGAN KEEGAN & CO.
Lawyers with the Securities Law Firm of Shepherd Smith Edwards & Kantas LLP, www.sseklaw.com, are investigating claims involving Small Business Administration (“SBA”) related securities purchased through Morgan Keegan & Co (“Morgan Keegan”). Between February 2008 and April 2009, Morgan Keegan was in the business of purchasing small business loans from across the country, pooling them together, and then reselling tranches of those pools to institutional investors.
However, during this same period, demand for these securities was falling. Since Morgan Keegan was purchasing these loans and pooling them itself, its inventory levels continued to rise. In response, Morgan Keegan directed its SBA Desk to sell off a large portion of the inventory. The desk entered a number of fictitious trades in an effort to artificially reduce the amount of SBA loans that the firm was holding. Specifically, these fictitious trades purported to reduce the inventory of SBA loans from approximately $82 million to approximately $7 million. The SBA Desk then repeatedly manipulated the settlement dates, repeatedly pushing back the date the fake trades were supposed to close in order to prevent the fraud from being uncovered.
This continued for approximately a year before Morgan Keegan’s records were corrected and the trader at the SBA Desk was terminated. However, as a result of this misconduct, it is likely that anyone who purchased these SBA loan securities from Morgan Keegan during this time period did so under false pretenses. Morgan Keegan’s difficulty finding buyers for these securities was being masked by false trades, potentially convincing customers that these SBA loans were far more liquid than they actually were. Similarly, the SBA Desk was likely willing to make a number of claims about these securities that were not true in order to find buyers and avoid his fraud being uncovered.
If you purchased SBA Loan securities from Morgan Keegan during this time period, contact the law firm of Shepherd, Smith, Edwards & Kantas LLP for an evaluation of your account to determine if you might have a claim to attempt to recover some or all of your losses. All communications will be kept strictly confidential, and you will not be billed in any way for a consultation.
Shepherd Smith Edwards & Kantas LLP has a team of attorneys, consultants and staff with more than 100 years of combined experience in the securities industry and in securities law. For more than two decades, our firm has represented thousands of investors nationwide to recover losses. We have represented clients in Federal and state courts and in arbitration through the Financial Industry Regulatory Authority (FINRA), the New York Stock Exchange Inc. (NYSE), the American Arbitration Association (AAA) and in private arbitration actions.
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