In a decision likely to add to the legal woes of beleaguered brokerage firm Morgan Keegan, the North Carolina Court of Appeals upheld a ruling by the state’s Business Court that the firm had failed to establish the existence of an investor’s arbitration agreement.
As a result, and barring a reversal on further appeal, the case will proceed to a jury trial.
The decision in Capps v. Blondeau
is significant for other Morgan Keegan investors, who have largely had to confine their claims to arbitration before the Financial Industry Regulatory Authority (FINRA), with mixed results. It may also have larger implications as it calls into question Morgan Keegan’s record-keeping and document retention practices – which may be common at other brokerage firms.
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