Press Release--Mississippians File Suit Against Federal Agency
Mississippians file suit against Federal Agency, Secretary Hosemann joins lawsuit, calls SEC failures "inexcusable"
Jackson, Miss.- Secretary of State Delbert Hosemann has filed a brief in support of a lawsuit filed against the Securities and Exchange Commission (SEC). The case demands the SEC finally distribute millions of dollars in settlement funds to Mississippi investors.
"Injured Mississippi investors have been stopped from receiving their own money by their own government. What we have is yet another example of the federal government not following its own laws at the expense of hard-working Mississippians," says Secretary Hosemann.
In 2007-2008, Morgan Keegan misrepresented and overstated the value of certain mortgage backed investments during the housing collapse. As a result, over 39,000 investors nationwide lost over $1-Billion. Over 2,000 Mississippi investors lost more than $71-Million.
"We have had Mississippi investors die before they received the money owed to them," says Secretary Hosemann. "Many of these investors are elderly and on fixed incomes. It is inexcusable they have had to wait over two (2) years after the settlement agreement to receive their own money from their own government."
As a direct result of an investigation launched by the Mississippi Secretary of State's Office and several other state securities regulators, Morgan Keegan agreed to pay over $200-Million in penalties into two (2) separate funds: $100-Million to be distributed by the States and $100-Million to be distributed by the SEC. The $100-Million was distributed by the States last year.
More than two years later, the SEC has still not distributed restitution to the victims and has failed to even adopt a plan to pay the investors their money.
A lawsuit has been filed by several Morgan Keegan victims against the SEC to compel them to release the victim's money. Secretary Hosemann has filed Amicus Curiae in support of the lawsuit in U.S. District Court in Jackson.
"It is unconscionable to have come this far to have a federal agency bottle neck millions of dollars owed to Mississippi investors," says Secretary Hosemann. "As a last resort, I find this lawsuit necessary and support this action to order distribution."
As Securities regulator for the State of Mississippi, Secretary Hosemann made repeated requests for payment. After lengthy and delayed inaction by the SEC Fair Fund, all four (4) Mississippi Congressmen requested distribution of these funds in February 2013. The Attorney General of Mississippi demanded payment on April 1, 2013. All requests have been ignored.