Morgan Keegan & Co., the brokerage firm acquired by Raymond James Financial Inc., was ordered by a federal appeals court to pay a group of 18 investors a $9.2 million arbitration award.

The U.S. Court of Appeals in New Orleans yesterday reinstated the award by the Financial Industry Regulatory Authority. A federal judge in Houston erroneously found that the award was procured through fraud and that the arbitrators had exceeded their powers, according to the appellate court’s decision.

The investors claimed Memphis, Tennessee-based Morgan Keegan induced them to invest in four “highly risky” mutual funds, according to the decision. They alleged Morgan Keegan intentionally overvalued the assets held by the funds and used principal from the funds to pay dividends, according to the appellate court’s ruling.

Steve Hollister, a spokesman for St. Petersburg, Florida- based Raymond James, didn’t immediately return a call to his office yesterday after regular business hours seeking comment on the ruling.