VOL. 125 | NO. 229 | Wednesday, November 24, 2010
RMK Bond Fund Investors Win $1.8 Million
By Andy Meek
A burned investor in Morgan Keegan & Co. Inc.’s former family of soured bond funds has along with his wife won a seven-figure arbitration award against the Memphis investment banking firm.
Frank and Brenda Flautt won more than $1.82 million from Morgan Keegan because of their losses in the funds after filing a claim that asserted breach of fiduciary duty and misrepresentation, among other things. The Flautts had asked for $1.25 million in compensatory damages.
Frank Flautt was a protégé of Holiday Inn founder Kemmons Wilson, and Flautt’s company owns and manages the Hilton Sandestin Beach Golf Resort & Spa in Destin, Fla.
Their award was decided by a panel affiliated with the Financial Industry Regulatory Authority, and the panels generally don’t spell out reasons for decisions.
A recent University of Memphis Magazine profile of Flautt noted he has been a “driving force” behind the U of M’s Wilson School of Hospitality and Resort Management, as well as several athletics projects.
A statement from Morgan Keegan noted it was disappointed with the decision in the Flautt’s case and is considering an appeal. Also, the company said investors have lost five of six cases regarding the same funds in November.