According to an article in the Chicago Tribune (09/15/09), Grant, who won three NBA championships with the Chicago Bulls, invested approximately $3 million with Morgan Keegan in 2001. According to his complaint, the funds were marketed as conservative investments. But in 2007, the funds dramatically dropped, losing more than 55 percent of their value while similar funds reportedly lost less than seven percent of their value.
The problem, according to reports, is that the funds were invested in debt-related securities and were hit hard by the subprime mortgage meltdown. Investors allege they were not told that the funds were so heavily concentrated in such securities. Grant's filing alleged that Morgan Keegan did not inform him about the true risks associated with the funds and that the company did not properly supervise fund managers.
In September 2009, a FINRA (Financial Industry Regulatory Authority) panel found in favor of Grant, awarding him $1.46 million but not releasing their reasons for the award. But the story does not end there. Because more than two years later, not only has Grant not received the money, he's filed a further arbitration against Morgan Keegan.
Although FINRA panel decisions are considered binding, they can be appealed under a specific set of circumstances. Morgan Keegan appealed the decision in the Grant case saying that statements made by arbitrators during the proceedings showed they had "predetermined the outcome."
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A spokesperson for Morgan Keegan called the filing "frivolous."
Lawyers say that it is rare that an arbitration panel's decision would be appealed in court and even more rare to appeal the court's decision to uphold the panel's ruling.