WASHINGTON (AP) — Morgan Keegan & Co. is paying $200 million to settle civil fraud charges that it overstated the value of mortgage investments just as the housing market was collapsing and lured buyers in with false sales materials.
Federal and state regulators said the Memphis-based investment firm failed to use "reasonable" procedures to calculate the value of the investments. Half of the money will go toward compensating investors in five states.
The Securities and Exchange Commission, regulators in five states and securities industry regulators announced the settlement Wednesday. Two former employees of the firm also agreed to pay civil penalties.