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Note: Regions Financial agreed to pay $210 million to settle allegations that its Morgan Keegan brokerage fraudulently marketed mutual funds and said it hired Goldman Sachs Group to explore strategic options for that unit.
* Seemingly safe funds lost more than half their value
* "Strategic alternatives" sought for Morgan Keegan
* Sale could fetch up to $1.3 bln-analyst
* Shares of Regions close down 1.4 percent
CHARLOTTE, N.C./NEW YORK - Regions Financial Corp agreed to pay $210 million to settle allegations that its Morgan Keegan brokerage fraudulently marketed mutual funds and said it hired Goldman Sachs Group Inc to explore strategic options for that unit.
Seven federal and state regulators including the U.S. Securities and Exchange Commission had accused Morgan Keegan of fraudulently misleading investors from January to July of 2007 about the risks of mutual funds filled with subprime mortgages, and artificially inflating the funds' prices.
Wednesday's settlement was announced one day after the SEC said another major bank, JPMorgan Chase & Co, agreed to pay $153.6 million to settle charges it defrauded investors who bought mortgage debt, also on the eve of the credit crisis.
The accord with Regions, a large U.S. southeast regional bank based in Birmingham, Alabama, stemmed from roughly $1.5 billion of investor losses tied to five Morgan Keegan funds.
Some of these funds,...