Morgan Keegan Ordered to Pay Over $250,000 in Madoff Feeder Fund
Morgan Keegan has been ordered by a Financial Industry Regulatory Authority
arbitration panel to pay more than $250,000 to a Florida couple who lost
their investment after their money was channeled to Bernard L. Madoff
Securities. Jeffrey and Marisel Lieberman lost $200,000 by investing with
the firm, which is a unit of Regions Financial Corp.
The panel determined that Morgan Keegan failed to do adequate due diligence on Connecticut-based Greenwich Sentry LP, which has been identified as a feeder fund for Bernie Madoff.
“There is clear and convincing evidence that Morgan Keegan was grossly negligent in not performing substantial due diligence and as a result it fraudulently misrepresented the risk of this investment,” the panel wrote.
Morgan Keegan has been ordered to repay the Lieberman’s their $200,000, plus interest from the time their original investment was made in May 2007. Morgan Keegan has also been ordered to pay the Lieberman’s $50,000 in punitive damages.
“We are very pleased with the decision,” said the Lieberman’s attorney. “My clients got everything we asked for.”
However, a spokesperson for Morgan Keegan indicated that the firm would appeal the award.
The arbitration panel cleared the Lieberman’s financial advisor, Julio Alameyda, of any wrongdoing. They determined that Mr. Alameyda was not aware of the poor job his firm did in its due diligence.