In June 2011, Morgan Keegan and Morgan Asset Management agreed to pay $200 million to settle civil fraud charges because it overstated the value of mortgage investments in 2007 during the collapse of the housing market. Under the settlement, the U.S. Securities and Exchange Commission is to distribute $100 million to the victims and the other half is to be distributed by the 50 states. In 2012, all 50 states distributed $100 million to the victims, but the other $100 million remains in a Fair Fund at the federal agency.
The SEC has failed to distribute millions of dollars to 39,000 investors in five states who lost money due to the settlement. Barrett Law Group filed a lawsuit on July 25, 2013, in U.S. District Court for the Southern District of Mississippi, on behalf of three state residents who have not received their portion of the Fair Fund.
The suit seeks to enforce the SEC’s Fair Fund distribution regulations in order to distribute funds to those who lost money because of the Morgan Keegan settlement.