The Securities and Exchange Commission has issued a cease and desist order against eight former directors of five Regions Morgan Keegan open- and closed-end funds that were heavily invested in securities backed by subprime mortgages.
The SEC began the proceeding against the directors in December 2012, alleging they failed to satisfy their pricing responsibilities under the federal securities laws. Under these laws, fund directors are responsible for determining the fair value of portfolio securities for which market quotations are not readily available.
They also must determine the methodologies to be used to fairly value securities and must periodically re-evaluate the appropriateness of the methodologies.
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