Posted 10/26/2012 03:12 pm
Updated 1 year ago
Morgan Keegan & Co. has agreed to pay a $15,000 fine and to reimburse an Arkansas couple nearly $45,000 for the actions of one of its former agents, Keith H. Freeman.
According to the consent order signed and released on Friday, Freeman engaged in what the staff of the Arkansas Securities Department called "switching" of mutual fund investments and also steered the husband and wife, who are nearing retirement age, into unsuitable investments.
A review of the clients' account sowed that "freeman recommended the sale of A shares of mutual or bond funds belonging to [the couple] and the purchase of more A shares in either the same or similar mutual or bond funds, which generated commissions for Freeman without apparent benefit to [the clients]," according to the order.
Freeman worked for Morgan Keegan from Nov. 14, 2006, to April 25, 2011.
He also recommended the purchase of seven non-traditional exchange-traded funds that were unsuitable for long-term investment by unsophisticated clients.
The staff of ASD found that Morgan Keegan "failed to reasonably supervise Freeman." Morgan Keegan agreed to the penalties in the order but neither admitted nor denied the findings.