Investment News reports that Morgan Keegan’s legal fees have skyrocketed during the past two years to $251 million.  Morgan Keegan’s legal costs are largely the result of defending itself from investor claims stemming from poorly performing bond fund that held toxic mortgage-back securities.  In 2008, the firm’s legal expenses accounted for 6% of the firm’s total revenue.  But in 2009, legal expenses doubled, accounting for 12% of the firm’s total revenue.  In all Morgan Keegan had revenue had revenue of $1.28 billion last year and spent $161 million in “professional and legal fees”.

Morgan Keegan is “potentially on the hook for tens of millions of dollars, if not more,” said Andrew Stoltmann, a plaintiff’s attorney.  He has about 15 clients suing Morgan Keegan.  Morgan Keegan faces hundred more arbitration claims from investors who bought the company’s bond funds only to see the funds lose as much as 95% of their value.  In January alone, the firm lost separate claims with awards of $2.5 million and $1.1 million.