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NEW YORK (By Helen Kearney) – A Financial Industry Regulatory Authority panel has ordered Morgan Keegan to pay more than $250,000 after the firm invested all of a client’s portfolio in a hedge fund that channeled its money to Bernard L. Madoff Securities.

The arbitration panel found that Morgan Keegan, a unit of Regions Financial Corp, failed to do adequate due diligence on Greenwich, Connecticut-based Greenwich Sentry LP, which was a feeder fund for Madoff.

Morgan Keegan clients Jeffrey and Marisel Lieberman invested their entire account of $200,000 in the fund, which filed for bankruptcy in November 2010.

“There is clear and convincing evidence that … Morgan Keegan was grossly negligent in not performing substantial due diligence and as a result it fraudulently misrepresented the risk of this investment,” the panel wrote.

The FINRA panel ordered Memphis, Tennessee-based Morgan Keegan to repay the Liebermans their $200,000 investment, plus 6 percent annual interest from when the investment was made in May 2007. They were also ordered to pay $50,000 in punitive damages and $14,000 for expert witness fees.

“We are very pleased with the decision,” said Barbara Riesberg, the Liebermans’ lawyer. “My clients got everything we asked for.”

A Morgan Keegan spokeswoman said the firm disagreed with the panel’s findings and planned to appeal the award.

The panel said that under Morgan Keegan’s internal compliance rules, clients should not be invested in hedge funds unless they list “speculation” as one of their primary investment objectives when they open an account. The Liebermans had listed speculation as their last investment objective.

The Liebermans’ financial adviser, Julio Almeyda, was cleared of wrongdoing and the panel recommended that references to the case be removed from his registration records. The panel found that Almeyda was not aware of the lack of due diligence performed by his firm and did not know that the information he gave to the Liebermans about the riskiness of the investment was false and misleading.

Morgan Keegan has faced hundreds of arbitration proceedings over the past year from clients who had invested in mutual funds that lost more than 50 percent of their value from exposure to subprime mortgage debt.

(Reporting by Helen Kearney; Editing by Richard Chang and Maureen Bavdek)

Copyright 2010 Thomson Reuters. Click for Restrictions.

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FLORHAM PARK, N.J. — Sal Alosi tripped up when he told the New York Jets his side of the story.

Now, the embattled assistant coach could be looking to save his job. Alosi, New York’s strength and conditioning coach, was suspended indefinitely by the team Wednesday after he acknowledged that he told five inactive players to stand next to each other for a punt return, during which he tripped a Miami Dolphins player.

“As we continued our investigation, we discovered some new information,” general manager Mike Tannenbaum said in a conference call from the NFL owners meetings in Dallas, “and the players at the Miami game were instructed by Sal to stand where they were to force the gunner in the game to run around them.”

That was information Alosi did not initially volunteer Monday, according to Tannenbaum. The team suspended Alosi for the season without pay and fined him an additional $25,000 after he stuck out a knee and tripped Miami’s Nolan Carroll, who was covering the punt in the third quarter of the Dolphins’ 10-6 win Sunday.

“Over the course of the next couple of days, more information came out that really doesn’t sit well with us,” Tannenbaum said.

During a news conference Monday, Alosi fought back tears as he called his actions – tripping Carroll – “inexcusable and irresponsible.” He also said no one was instructed to stay up on the sideline to prevent Dolphins players from running out of bounds on kicks. Miami’s Reshad Jones was penalized for doing that earlier in the game.

However, tight end Jeff Cumberland, who was inactive Sunday, said it was nothing new for the players to line up next to each other as they did against the Dolphins.

“Since the beginning of the year, we’ve been instructed to line up behind the (white) line,” he said, adding that it was only Alosi who has told them to do so.

Coach Rex Ryan and special teams coordinator Mike Westhoff both have denied they ordered anyone to do what Alosi told the players.

“It caught me off guard,” Ryan said.

Westhoff said he doesn’t teach the technique and reviewed every return by the Jets this season with assistant special teams coordinator Ben Kotwica.

“For the most part,” Westhoff said, “we didn’t see it.”

Westhoff said he didn’t believe it when he first heard that players might have been ordered to stand together along the sideline.

“I was like, ‘Please, give me a break. The whole thing is ridiculous,’” Westhoff said. “Then, when I saw it, I was like, ‘Whoa.’ You didn’t have to be Sherlock Holmes to see they were lined up.”

Westhoff added that other teams may use the wall, and singled out the New England Patriots as one that has.

“I’m not accusing the Patriots of doing something wrong,” Westhoff said. “Maybe they’re doing something smart. Watch the tape, you tell me.”

Tannenbaum said he met with Ray Anderson, the NFL’s executive vice president of football operations, on Wednesday morning and the league supported the Jets’ decision. Tannenbaum added that the NFL was also looking into the incident.

“Once we get all the information, we’ll make a final determination,” Tannenbaum said. “But, based on this information, Sal’s been suspended indefinitely.”

Tannenbaum did not rule out the possibility that Alosi will be fired. A decision will be made once he and Johnson return from Texas.

“All options are on the table,” he said.

League spokesman Greg Aiello said that “Ray Anderson and his staff are reviewing and clarifying sideline protocols with the teams at today’s league meeting in Fort Worth and will follow up with a memo to the clubs this week.”

When asked at the meetings if what the Jets did was improper, Anderson said: “Yes.”

Westhoff said he didn’t know if such a technique was within the rules, but it doesn’t matter to him regardless.

“Does it help you on the sideline? I think it’s ridiculous,” he said. “I don’t do it, nor do I care if anyone else does it.”

Tannenbaum said the team looked at the game film of the play and “it looked to me like it was unusual for them to be standing that way.” The Jets interviewed the players who were standing near Alosi, but will not take any action against them.

“This is just about Sal,” Tannenbaum said.

Tannenbaum said the latest decision by the team regarding Alosi comes “for the totality of the situation.”

Alosi was first with the Jets from 2001-05, then worked for the Falcons for one season before he was hired by then-New York coach Eric Mangini in 2007 to be the head strength and conditioning coach.

A former linebacker at Hofstra, Alosi earned an award for sportsmanship and fair play both on and off the field during his college career.

“I’m really disappointed,” Tannenbaum said. “Sal’s done a lot of good things as the strength and conditioning coach and done a lot of good things for the organization, but, yeah, I’m very disappointed with what’s happened.”

Carroll left the game Sunday with a muscle spasm, but returned in the fourth quarter. Alosi later apologized to him and Dolphins coach Tony Sparano.

“I’m glad he called me,” Carroll said Wednesday. “He admitted it to me, like a man. He was sorry.”




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