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Coughlin Stoia Geller Rudman & Robbins LLP Files Class Action Suit Concerning Certain Mutual Funds Offered by Regions Morgan Keegan Trust

Monday, October 06, 2008

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SAN DIEGO--(BUSINESS WIRE)--Coughlin Stoia Geller Rudman & Robbins LLP (“Coughlin Stoia”) (http://www.csgrr.com/cases/morgankeeganco/) today announced that several class action lawsuits have been commenced in the United States District Court for the Western District of Tennessee against Morgan Keegan & Co., Inc., Morgan Keegan Asset Management, Inc., Regions Financial Corporation and related companies and officers and directors. The first complaint related to this matter is Willis, et. al. v. Morgan Keegan & Company, Inc., et al., No. 07-cv-2830-SHM-dkv (the “Willis complaint”).

The plaintiffs are persons who purchased or otherwise acquired the shares of certain closed-end mutual funds (NYSE:RHY) (NYSE:RMA) (NYSE:RSF) (NYSE:RMH) offered by Regions Morgan Keegan Trust, including shares of the RMK Multi-Sector High Income Fund, Inc. (the “RHY Fund”), the RMK Advantage Income Fund (the “RMA Fund”), the RMK Strategic Income Fund (the “RSF Fund”) and the RMK High Income Fund (the “RMH Fund”) (collectively referred to as the “Funds”), pursuant and/or traceable to the Funds’ false and misleading Registration Statements and Prospectuses during the period December 6, 2004 through February 6, 2008 and purchasers of any of the Funds during the period from December 8, 2006 through December 5, 2007.

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiffs’ counsel, Darren Robbins of Coughlin Stoia at 800/449-4900 or 619/231-1058, or via e-mail at djr@csgrr.com. If you are a member of this class, you can view a copy of the Willis complaint as filed or join this class action online at http://www.csgrr.com/cases/morgankeeganco/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaints charge the Funds’ registrants, the Funds’ administrator, Morgan Keegan & Company, Inc. (“Morgan Keegan”), the Funds’ adviser, Morgan Keegan Asset Management, Inc., Regions Financial Corp. and certain of Morgan Keegan’s officers and/or directors with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934.

The complaints allege that defendants issued materially false and misleading statements regarding the Funds’ portfolios and financial results. As a result of defendants’ false statements, the Funds’ shares traded at artificially inflated prices.

According to the complaints, portions of the Funds’ portfolios were invested in collateralized debt obligations (“CDOs”), including CDOs backed by subprime mortgages to high-risk borrowers. For years, shares of the Funds traded within narrow ranges. Then in early March 2007, as the subprime crisis began to emerge, the Funds began to trend lower as the market learned of their exposure to the subprime market. Nonetheless, shares of the Funds continued to trade at artificially inflated prices as the full extent of the Funds’ exposure had not yet been revealed. As late as the summer of 2007, as the housing and credit crisis deepened, the Funds continued to play down and conceal the Funds’ growing exposure to the problems in the subprime market. Beginning in early July 2007, the Funds began to acknowledge serious problems in their portfolios related to the Funds’ exposure to the subprime market. On November 7, 2007, Portfolio Manager James C. Kelsoe wrote a letter to investors in which he acknowledged further problems the portfolios faced due to the deterioration in the housing sector and the subprime mortgage crisis. The shares continued to collapse subsequent to these announcements as the impact of the risky holdings in the Funds’ portfolios became more apparent to the market.

As a result of these disclosures, the price of the Funds’ shares collapsed. For example, RMH Fund shares closed at $4.20 per share on February 6, 2007, a decline of 70% from early July 2007.

According to the complaints, the true facts which were omitted from the Registration Statements/Prospectuses or were known by the defendants but concealed from the investing public during the Class Period were as follows: (a) the Funds lacked adequate controls and hedges to minimize the risk of loss from mortgage delinquencies which affected a large part of their portfolios; (b) the extent of the Funds’ liquidity risk due to the illiquid nature of a large portion of the Funds’ portfolios was omitted; (c) the extent of the Funds’ risk exposure to mortgage-backed assets was misstated; and (d) the extent to which the Funds’ portfolios were subject to fair value procedures was misstated.

Plaintiffs seek to recover damages on behalf of all persons who purchased or otherwise acquired shares of the Funds pursuant and/or traceable to the Funds’ Registration Statements and Prospectuses or who purchased shares of the Funds during the Class Period. The plaintiffs are represented by Coughlin Stoia, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Coughlin Stoia, a 190-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Houston and Philadelphia, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Coughlin Stoia Web site (http://www.csgrr.com) has more information about the firm.

Source: BUSINESS WIRE