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Former fund directors face charges

WASHINGTON — Eight former mutual fund directors are facing civil charges after they allowed others at the firm to set values for mortgage securities and investors lost roughly $1.5 billion on five funds.

The Securities and Exchange Commission said the directors at Morgan Keegan & Co. delegated the duty to fund managers, even though directors are required by law to set values when market prices are not available.

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Last year, Morgan Keegan agreed to pay $200 million to settle the SEC’s fraud charges that it inflated the investments’ value in 2007.

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