Settlement announced in Mamtek investor lawsuit
Attorneys say an investment firm has settled a federal lawsuit accusing it of bilking investors out of $39 million in a failed effort to build an artificial sweetener plant in Moberly.
The settlement was announced today, the same day the lawsuit against investment banking firm Morgan Keegan was set for trial. Settlement details weren't disclosed.
The lawsuit sought returns of investments from 133 people who bought $39 million in bonds between July 2010 and September 2011. The city of Moberly issued bonds to pay for construction of a Mamtek artificial sweetener plant, which was expected to bring 600 jobs to Moberly. Morgan Keegan purchased the bonds as the underwriter and sold them to investors, but the company later defaulted on bond payments and the factory never was built.
The CEO of Mamtek, Bruce Cole, was sentenced to 7 years in prison in November after pleading guilty to felony stealing and securities fraud charges.