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| Horace Grant gets his $1.5 mil back https://mail.chicagofanatics.com/viewtopic.php?f=34&t=37201 |
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| Author: | garo aida [ Mon Sep 14, 2009 9:05 pm ] |
| Post subject: | Horace Grant gets his $1.5 mil back |
Ex-Bull Horace Grant wins $1.46 million award against Morgan Keegan Losses suffered in mutual funds September 14, 2009 Former Chicago Bull Horace Grant won a $1.46 million arbitration award against Morgan Keegan & Co. for losses in some bond mutual funds, the largest victory against the brokerage firm to date for his Chicago-based lawyer. The award, announced last Friday, represents nearly all of the unrealized losses Grant allegedly suffered as of January 2008, said his attorney, Andrew Stoltmann. Grant, who played with the Bulls from 1987 to 1994 when they won three NBA championships, had alleged that Morgan Keegan, a Memphis, Tenn.-based broker, sold him four high-yield bond funds with more risk in them than he was told. He initially invested about $3 million with Morgan Keegan eight years ago, Stoltmann said. Morgan Keegan marketed the funds as conservative investments appropriate for retirees who were looking to protect their principal, Stoltmann said. In 2007, the four funds plummeted by an average of 58 percent, according to Grant's complaint filed in March 2008 with the Financial Industry Regulatory Authority, or Finra, which runs the arbitration forum for investors. Similar bond funds lost 6.9 percent that year, the complaint said. The Morgan Keegan funds were clobbered by the meltdown in sub-prime residential mortgages, largely because they invested in risky debt-related securities and other mortgage-related holdings. Stoltmann claimed that Morgan Keegan failed to disclose the funds' large concentrations of such securities, an allegation that the brokerage firm had denied. The Finra arbitration panel did not provide any reasons for finding in favor of Grant, who did not return phone calls seeking comment. Grant, who lives in California, retired in 2004 from the Los Angeles Lakers. Morgan Keegan said in a statement that "arbitration cases turn on their individual facts and we don't agree with the outcome." The brokerage firm, a unit of Regions Financial Corp., a bank based in Birmingham, Ala., faces a flood of arbitration claims from investors related to its high-yield bond funds. Investors in the funds reportedly lost more than $2 billion in 2007. Stoltmann said he has about 60 cases against Morgan Keegan pending before Finra. He lost his first few cases against Morgan Keegan, according to Finra records, but has won his last four, including the Grant case. His biggest previous award in a Morgan Keegan case was about $700,000, Stoltmann said. "Grant's award is important because it shows that arbitrators can comprehend these complex investments and hit a brokerage firm hard for sub-prime losses," Stoltmann said. A Morgan Keegan spokesperson said that investor claims have been denied in about half of arbitrations cases heard to date. Finra has so far heard 57 Morgan Keegan cases related to its high-yield mutual funds. Last year, complaints involving mutual funds outnumbered complaints involving stocks for the first time, according to Finra statistics. The phenomenon has continued so far this year, as last year's bear market shattered belief that mutual funds that invest in bonds or other fixed-income products were less volatile than stocks. "What made this bear market so insidious is number of fixed-income clients who thought they were in safe investments but have lost 50 to 75 percent of their money," Stoltmann said. |
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| Author: | spanky [ Mon Sep 14, 2009 9:07 pm ] |
| Post subject: | Re: Horace Grant gets his $1.5 mil back |
Joan Esposito |
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| Author: | garo aida [ Mon Sep 14, 2009 9:22 pm ] |
| Post subject: | Re: Horace Grant gets his $1.5 mil back |
Tommy Shaw. |
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