[ by Melanie Gretchen ]

The U.S. Court of Appeals for the 9th Circuit, in California, upheld a 2009 ruling by a FINRA arbitration panel involving retired NBA star Horace Grant (as claimant) and Morgan Keegan (as respondent).  Morgan Keegan appealed the $1.45 million that the arbitration panel awarded to Mr. Grant, who filed the complaint following losses incurred in 2007 and 2008 on investments in Morgan Keegan bond funds.

Facts and Circumstances Pertaining to FINRA Arbitration Case.   Mr. Grant, 47, filed a claim against his former brokerage over his losses in 2008.  A FINRA arbitration panel sided with Grant and awarded him $1.46 million in 2008, including (i) $1.45 million in compensatory damages and (ii) $10K for legal costs.  Morgan Keegan's failure to appeal to the U.S. District Court for the Central District of California to overturn the decision in 2009 led to a 10/11/09 hearing before the appeals court.  Mr. Grant bought most of the troubled funds through his Morgan Keegan brokerage account in 2004, when the brokerage owned the sports agency that represented Grant.

Grant's Win.   Before the court hearing, Morgan Keegan, a Raymond James unit, argued that arbitrators in the case might have been biased, prejudged the outcome or exceeded power.  Mr. Grant's victory goes into the record books, alongside these victories achieved as a professional basketball player:

• his NBA career of 17 years
• 3 titles with the Chicago Bulls teams featuring Michael Jordan
• 1 title with the Los Angeles Lakers

Morgan Kegan's Loss.  This being a zero sum game, in which every dollar won by someone is matched off against a dollar lost by another.  Thus, just as Mr. Grant continues his winning streak, Morgan Keegan unfortunately continues its losing streak - that now can be viewed as a sea of losses: 

• the 2nd loss on appeals this week for Morgan Keegan, which was sold to Raymond James by Regions Financial Corp over the summer
• more than 1,000 customer arbitration cases
• a $200 million civil regulatory fine
• a star manager at the firm having been banned from the securities industry
• the loss of value by 80% of the funds as the subprime market imploded

Andrew Stoltmann, lawyer for Mr. Grant, had this to say after receiving the Court's decision: "We're pleased that the 9th circuit saw Morgan Keegan's frivolous attempt to delay payment to Horace Grant.  This has been a long odyssey."

For further details, go to [Reuters, 10/25/12].