Indianapolis-based Indiana Children’s Wish Fund has been caught in the national subprime mortgage lending crisis.
The small not-for-profit, which grants wishes to terminally ill children, filed an arbitration claim after an investment it had in an intermediate-bond fund lost about $50,000 between late June and late September on an initial investment of $222,812. The bond fund had more than half its assets in mortgage-related investments as of mid-year, according to the filing.
The claim is against Memphis-based Morgan Keegan & Co. and Indianapolis-based financial adviser Christopher Herrmann. The charity claims Herrmann said that moving the money from CDs and a money-market account to the bond fund “was completely safe and a smart business decision.”
Herrmann referred questions to Morgan Keegan, where a representative declined to comment.