A FINRA arbitration panel has shot down a $2.2 million claim made by investors attempting to recover losses from bond funds sold by Morgan Keegan & Co., in a decision poised to spark further litigation.

The case involves a group of 22 investors, who first brought the claim to FINRA in December 2009, alleging breach of fiduciary duty, misrepresentations, statutory fraud, common law fraud and violations of the Texas Security Act, a FINRA ruling dated March 9 shows.

The FINRA arbitration panel ruled out the $2.2 million in compensatory damages requested by the claimants, and has ordered that investor group to pay Morgan Keegan about $34,700 in costs and $400,000 in attorneys’ fees. In addition, the investor group and Morgan Keegan have been ordered to split the $21,600 total hearing fees.

That new decision contradicts a $9.2 million award handed down in a related case last October to a group of 43 investors, some of whom are claimants in both cases. The two cases were originally combined until Morgan Keegan requested their separation, said Paul Dobrowski, partner at Dobrowski LLP, who served as the lawyer for the claimants in both cases.

“It’s ludicrous and ridiculous that this panel, which didn’t pay attention to the documents and the record, made this decision,” Dobrowski said. “It just shows how inconsistent and unfair FINRA panels can be.”

Dobrowski said he has filed a request for a correction with FINRA on this decision because not all of his clients are liable for attorneys’ fees as part of their agreement with Morgan Keegan. Those who are, about 10 clients should only be liable for their own, and not the group’s expenses, Dobrowski said.

 The decision reflects a lack of effort from the deciding arbitrators, Dobrowski said— one of whom he witnessed sleeping during the proceedings.

 “I don’t mind losing,” Dobrowski said. “What I mind is people not doing their jobs and paying attention.”

A statement provided by Morgan Keegan on Thursday said the firm is pleased with the FINRA panel’s decision in this case.

“It is a cautionary tale for wealthy, sophisticated investors who ignore the risk of filing an unwarranted claim,” a company spokeswoman said via email. “The award of fees in this case, like those in several other cases involving Morgan Keegan, confirm that arbitration panels take the arbitration process very seriously, and have low tolerance for frivolous actions.”

On Wednesday, Morgan Keegan filed a motion to confirm the FINRA panel’s decision in this case, including the attorneys’ fees, with the U.S. district court in Texas. Morgan Keegan is also appealing the $9.2 million award decision on behalf of the claimants from October.

The decision follows the investors’ participation in various high-risk closed-end mutual funds sold by Morgan Keegan. Investments named in the latest decision include RMK High Income Fund, RMK Advantage Income Fund, RMK Multi-Sector High Income Fund and RMK Strategic Income Fund.

Since 2007, the RMK funds have been the subject of more than 1,000 cases, said Sonn Erez PLC Partner Jeff Erez, a lawyer who has represented claimants in other cases against the funds. That likely represents just a fraction of the investors in the funds, he said, which had $2 billion in losses.

“I can’t think of any other product that generated that much arbitration,” Erez said.

Those funds, the claimants in this recent case alleged, operated a fraudulent scheme involving illiquid mortgage-backed loans and collateralized debt obligations. Participation in the investment included purchase of initial shares followed by an automatic reinvestment of dividends. The result, the investors in this case claimed, is that they lost most of their capital when they did not sell their shares.

The funds were never represented as high risk, Erez said from his experience representing other claimants in other cases, and were marketed with terms including “conservative,” “capital preservation” and “reduced volatility.”

“In my opinion plaintiffs in the RMK cases should win every case,” Erez said. “But that’s not always going to happen.”