By GREG BLUESTEIN
Associated Press
ATLANTA – Five states and federal regulators have reached a $200 million settlement with Morgan Keegan & Co. over allegations that its brokerage firm engaged in reckless business practices that led to an estimated $1.5 billion in losses to investors.
William Hicks of the U.S. Securities and Exchange Commission announced the deal today. State regulators from Alabama, Kentucky, Mississippi, South Carolina and Tennessee were involved in the settlement, as well as the Financial Industry Regulatory Authority.
The regulators say Morgan Keegan overstated the value of funds backed by subprime mortgages and used false and misleading sales materials.