Regions Financial Corp. said Wednesday that it would combine two divisions within Morgan Keegan & Co. Inc. to create a new investment banking division.

Robert Baird, who had been the president of the unit's fixed-income division, will run the new investment bank, which includes Morgan Keegan's equity capital markets and fixed-income capital markets operations. The new division will have about 300 investment bankers.

Morgan Keegan's securities business has been stung in the past two years by arbitration claims over how certain funds handled investments in auction-rate securities.

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