The accused directors are J Kenneth Alderman of Birmingham; Jack Blair of Germantown, Tennessee; Albert Johnson of Hoover, Alabama, and James Stillman McFadden of Germantown.
Other four directors accused by the market watchdog include Allen B Morgan Jr of Memphis; W Randall Pittman of Birmingham; Mary S Stone of Birmingham and Archie W Willis III of Memphis.
The RMK mutual funds involved in the case were the High Income, Multi-Sector High Income, Strategic Income, Advantage Income, and Morgan Keegan Select.
During 2007, when the mortgage market was on the edge of financial crisis, the funds invested in some securities backed by subprime mortgages, were misinterpreted by the accused, claims the market supervisor.
As a result, the net asset values of the funds were materially misstated during 31 March to 9 August in 2007; subsequently the prices at which one open-end fund sold, redeemed, and repurchased its shares were incorrect.
SEC Enforcement Division director Robert Khuzami said that the investors depend on board members to set up an accurate process for valuing their mutual fund investments.
"Otherwise, they are left in the dark about the value of their investments and handicapped in their ability to make informed decisions," Khuzami added.
