Morgan Keegan Directors Settle SEC Charges

On June 13, 2013, the U.S. Securities and Exchange Commission (SEC) announced a settlement in the previously filed enforcement proceeding against eight former interested and independent directors (the Directors) of five registered funds (the Funds) advised by Morgan Asset Management, Inc. (the Adviser). (See Former Mutual Fund Directors Agree to Settle Claims That They Failed to Properly Oversee Asset Valuation.) The enforcement proceeding, which was filed by the SEC on December 10, 2012, charged the Directors with several violations of the Investment Company Act of 1940 based upon their alleged failure to properly carry out their duties during several months in 2007 with respect to overseeing the fair valuation of certain securities held by the funds. More specifically, the SEC alleged that the Directors delegated their asset-pricing responsibilities to the Adviser's valuation committee without asking meaningful questions, specifying a fair valuation methodology or