Deals & People September 10, 2008

Securian To Acquire Capital Financial Group

Securian Financial Group, Inc., today announced plans to purchase Capital Financial Group, Inc., and its broker/dealer affiliate, H. Beck, Inc. of Rockville, Maryland.
Reported by

The companies signed a definitive agreement outlining details of the purchase transaction, which is scheduled to close by year end, subject to regulatory approval, according to a press release. CFG’s senior management team will remain in place and the firm will continue to operate independently in Maryland under Securian’s ownership.

According to the release, each firm is enjoying strong growth: CFG’s three-year compound annual growth rate is 17% and SFS’ is 27%. The acquisition will expand SFG’s distribution to nearly 2,000 advisers—approximately 750 with CFG and 1,220 with SFS.

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Securian said no layoffs are expected at either firm. “This business combination is beneficial to all parties involved,” said Randy Wallake, president of Securian Financial Group, in the release. “The biggest winners are the financial advisers and the clients they serve.”

Eric Meyers, president and CEO, Capital Financial Group, said in the release that CFG’s decision to open a Southern California service office in 2009 for CFG advisers is an example of Securian’s financial strength providing opportunities for CFG to grow and better serve its advisers. According to the release: “Both firms work to retain advisers—one of the biggest challenges facing broker/dealers—by developing “highly personal’ relationships with them.’

Compliance September 10, 2008

Law Firm Probes Memphis Investment Bank 401(k)

A Pittsburgh law firm is investigating stock drop concerns at a 401(k) plan sponsored by Morgan Keegan, a Memphis-based investment bank.
Reported by

The Stember Feinstein Doyle & Payne law firm said Wednesday it is looking into whether there were violations of the Employee Retirement Income Security Act (ERISA) in the offering of company stock within the 401(k) plan. According to a press releases, the firm is investigating conduct that allegedly caused losses to the Morgan Keegan & Company Profit Sharing and Retirement Savings Plan. Morgan Keegan is a subsidiary of Regions Financial Corporation.

The release said the law firm is looking into whether plan fiduciaries knew or should have known that Regions and/or its subsidiary Morgan Keegan were not properly disclosing their large exposure to Collateralized Debt Obligations and subprime mortgages, which has caused losses to Regions’ common stock and Morgan Keegan’s mutual funds.

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Specifically, the firm is investigating whether Morgan Keegan breached its fiduciary obligations:by continuing to offer Regions common stock and/or Morgan Keegan mutual funds as investment options for participant contributions when it was imprudent to do so; by not selling Regions stock and Morgan Keegan funds or otherwise protect the plan’s assets; and by making investments in Morgan Keegan and other mutual funds with large CDO/subprime mortgage exposure in various investment options of the plans.

The firm has already filed lawsuits in the U.S. District Court for the Western District of Tennessee against Regions Financial for participants of the Regions Financial and AmSouth 401(k) Plans, according to the press release.

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