Federal regulators are billing a Regions Bank subsidiary more than $200 million following a lengthy, multi-state investigation into fraud charges that could force the country’s 12th largest bank to sell its brokerage and investment banking unit.
Regions, a 2,000-plus branch bank headquartered in Birmingham, Ala., has hired Goldman, Sachs & Co. to look at potential new options for Morgan Keegan, or “strategic alternatives” to counter the costly settlement that Morgan Keegan was handed by financial regulators, The Birmingham News reports.
One of those options is selling Morgan Keegan, the corporation's investment banking and brokerage firm that operates in 20 states and employs more than 3,000 people. Banking analysts say selling the subsidiary would be a positive move for the shareholders of Regions, the only bank of its size still receiving government assistance through programs created by the bailouts:
Regions’ announcement came Wednesday at the same time authorities issued details of the settlement, which is the result of an investigation centered on seven proprietary mutual funds sold by Morgan Keegan broker-dealers to more than 30,000 account holders. Those seven funds lost about $1.5 billion during the year ended March 31, 2008.
Morgan Keegan and one of its affiliates, Morgan Asset Management, were accused of making material omissions and misrepresentations in marketing materials and regulatory filings.
The firms also withheld information from the Morgan Keegan sales force, provided preferential treatment to certain customers and failed to adequately supervise their employees, according to the allegations.
The firms did not admit or deny the majority of the allegations.
Read more here.
MAY 22 This post was written the day after the second line shooting in NOLA, by Brentin Mock. Mock is a friend of Deb "Big Red" Cotton, a blogger who was shot in the back and was seriously injured. It is a raw, emotional piece of writing, something the writer obviously felt he needed to get off his chest. But it raises questions that can't be easily dismissed, and might give some insight into where the source of these events truly is.
MAY 22 In this Baton Rouge Business Report post, Rolfe McCollister considers the privatization of bus service in Baton Rouge. After decades of under-funding, it is a mess, and although a tax (partially) passed last year, improvement hasn't happened yet. McCollister apparently feels it is time to let private business get in on the transit business.
MAY 22 This post on Bayou Buzz by Jeff Crouere urges the defeat of a bill that would grant modest pay increases over the next several years to the state's judges and clerks of court. The state is in no position to fund pay hikes, Crouere argues, with the pay increases costing a total of $9 million over several years. It sends the wrong message to the (proverbial) hard-working people of Louisiana, he says.
MAY 22 The Advocate reports here that State Treasurer John Kennedy is complaining about a meeting of the corporation that oversees the state's tobacco settlement. The Governor wanted it restructured, and he has some support, but not a lot. The corporation agreed with his plan, but Kennedy didn't, and it appears that the meeting was noticed in a manner completely different than that of all previous meetings. Kennedy's given to hyperbole, but in this case the fish don't smell too fresh.
MAY 22 In this Advocate story, Carencro Police Chief Carlos Stout says the recent federal indictment of a strip club owner is all wrong. The indictment alleges that drugs and prostitution went on with impunity because club staff made arrangements with "local" police. Stout says it never happened, and while his cops do work security in the parking lot, they're not allowed inside.
MAY 22 This amusing post in DIG Baton Rouge recounts an ad that ran on Craig's List recently; the advertiser was seeking tenants for a Beauregard Town house. He knew his market, and wrote an ad that the most ironical hipster couldn't resist. Apparently, he really did know his market, because the ad worked like a charm.
MAY 22 In this post in The Lens, Mark Moseley comments on the rhetoric Gov. Jindal employed in trying to save his tax "reform" package. One interesting point concerns Jindal's use of his brother, Nikesh, in a little story. Nikesh left Louisiana because of his inability to get a decent job, the story goes, but the story won't hold water: Nikesh lives in DC, which has an income tax level comparable to Louisiana, Moseley says. If income taxes caused the dismal situation, it should exist in DC too. Right?
MAY 22 This post by columnist John Maginnis traces the trajectory of the bill that would fund construction at community and technical colleges -- and bypass the Board of Regents and traditional higher ed funding mechanisms. Sure, it will bust the legislature's self-imposed debt limit, but some leges feel that there's more need (because there is more growth) in the community and technical college area than in the university area, he says.
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"The rich get slapped on the wrist, the poor go to prison!!"
So sayeth the Original Northsidian!!