Alabama lawsuit accuses Regions Bank, trustees of mismanaging trust founded by late secretary of state
The suit says board trustees used the fund to educate their children at out-of-state colleges which was not the intent of the trust
A lawsuit filed in Alabama alleges Regions Financial Corp. mismanaged a charitable trust named for a former Alabama secretary of state, saying it charged exorbitant fees and steered scholarship money to children of the trust board members.
The suit, dated July 7, was filed in Montgomery County Circuit Court by family members of Mabel Amos, who served as Alabama Secretary of State from 1967 to 1975, al.com reports.
According to the lawsuit, the board trustees benefited personally "using the funds in the Trust to educate their children at out-of-state expensive colleges and were not in financial need, while members of Amos’ immediate family were in financial need."
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The suit seeks to remove Regions as the trustee bank and require it to pay back all distributions to the trustee children.
The suit also calls for compensatory and punitive damages.
A gavel rests on sounding block next to a brass scale of justice in front of a long row of law books on a desk in a law office. (iStock / iStock)
Amos' will established a memorial trust in her name with Union Bank, which eventually merged with Regions.
According to the lawsuit, Regions began charging "outrageous" fees when oil was discovered on Amos’ property, in contrast to "reasonable" fees when there were only natural gas wells there.
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In the suit, the plaintiffs claim that Regions was paid about $7,000 for spending five hours a week administering the trust in 2010.
Regions Financial Corporation logo of a bank holding company is seen displayed on a smartphone and a pc screen. ( (Photo by Pavlo Gonchar / SOPA Images / Reuters Photos)
Within a year, that same five hours a week cost $92,736. From 2002 to 2018, the suit claims, the trust paid more than $1 million in administration fees to Regions.
The number and dollar amount of scholarships also increased, from $21,794 through five scholarships in 2011, to $214,000 among 17 scholarships two years later.
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Among those scholarships were "thousands of dollars" for the children of two attorney trustees, the suit claims, who did not attend colleges in Alabama.
Jennifer Elmore, vice president of corporate media and public relations for Regions, who would not comment directly on the suit.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| RF | REGIONS FINANCIAL CORP. | 27.28 | +0.54 | +2.02% |
"Regions’ fee is less than one percent of the market value of the assets under management, and that is consistent with our standard rates and competitive with industry rates," Elmore stated to al.com.
The Associated Press contributed to this report.