The secretary of state’s office is seeking civil penalties in a case in which 2,000 Mississippians allegedly were misled about six Morgan Keegan bond funds, losing $65 million.
Officials brought the case against three employees from the Memphis-based investment firm. The company itself is paying $200 million to settle civil fraud charges that it overstated the value of mortgage investments just as the housing market was collapsing in 2007 and lured buyers of its funds with false sales materials. Nationwide, Morgan Keegan’s customers lost a reported $1.5 billion.
In a Monday hearing, Jackson lawyer James Holland, representing the secretary of state’s office, accused Brian B. Sullivan, Gary Stringer and Michelle Wood, who work for Morgan Keegan and Co. and Morgan Asset Management, of misleading customers and financial advisers.