Regions Financial Corp. on Wednesday said that its investment banking unit may face civil charges from the Securities and Exchange Commission tied to several bond mutual funds that lost value last year.

The $142 billion-asset Birmingham, Ala., company said that Morgan Keegan & Co. has received a Wells notice from the agency's Atlanta office, which plans to recommend enforcement actions against the unit.

Morgan Keegan Asset Management Inc. and three employees have also been investigated, according to a filing with the SEC.

Regions is allowed to provide its perspective before the SEC takes any formal action. A company spokesman said that it is cooperating though it plans to "vigorously defend" itself.

Morgan Keegan also received a Wells notice in March related to an investigation of auction-rate securities sold and underwritten by the unit.

The SEC has been examining "the adequacy of the disclosures of the liquidity risks" and whether the unit sold securities "after its ability to support auctions was diminished," Regions said in an April quarterly report.

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