Missouri Secretary of State Jason Kander issued a press release Thursday regarding failed artificial sweetener manufacturer Mamtek. In the release, available here, Kander announced a cease-and-desist order against Morgan Keegan & Co. Inc., the underwriter for bonds issued for a Mamtek project to build a sucralose manufacturing facility in Moberly, Missouri.
This recent approach by Kander to recoup funds for investors alleges that Morgan Keegan did not complete adequate due diligence on the project prior to underwriting the bond issue. “"If Morgan Keegan had done its due diligence and investigated the feasibility of Mamtek's business plan we would not be here today," Kander said at a news conference in St. Louis. "This is unacceptable."
The city of Moberly issued over $30 million in bonds to fund construction of the plant. The project was derailed when the first principal payment on the bond was missed. Now the incomplete factory serves as a reminder of the 600 jobs that never materialized, and a loss for investors all of the U.S.
The failed project made headlines last year when Mamtek CEO Bruce Cole was charged with securities fraud by the Securities and Exchange Commission (“SEC”). The SEC complaint against Cole may be viewed by clicking here. These charges are in addition to the criminal charges Cole faces in Missouri related to Mamtek’s failed project.
It remains to be seen if Kander will be able to recoup anything, as investors who lost millions continue to seek ways to recoup from Morgan Keegan’s alleged lack of due diligence in this bond issue.
Please contact Block & Landsman if you invested in Mamtek bonds so we may discuss potential legal options with you.