The Securities and Exchange Commission said Tuesday that it is seeking a court order to require a Regions Financial Corp. unit to repurchase illiquid auction-rate securities.

The SEC alleged in a filing with the U.S. District Court for the Northern District of Georgia that Morgan Keegan & Co. failed to warn clients about the potential illiquidity of the securities, selling about $925 million of the securities from November 2007 to March 20, 2008. The agency said that clients were unable to liquidate about $1.2 billion of securities.

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