Last week, an Indiana charity that “makes wishes come true” for children with life threatening illnesses filed arbitration claims over sub-prime related losses it allegedly suffered in a bond fund managed by Regions Morgan Keegan. The Indiana Children’s Wish Find claimed that it lost $48,000 or 22% of its $220,000 investment in the Regions Morgan Keegan Select Intermediated Bond Fund.
The Wish Fund claims that it was misled by Morgan Keegan concerning the level of risk it assumed by investing in the fund. According to the Wish Fund Regions Bank, an affiliate of Morgan Keegan suggested that the Wish Fund move money from it’s money market account into the bond fund. Regions Bank allegedly represented that the bond fund was an appropriate low risk alternative to a CD. The Wish Fund alleged that the bond fund was heavily invested in risky-low rated mortgage debt.