Former Red Sox catcher Doug Mirabelli, a two-time World Series champion, and his wife Kristin, have won their securities claim against Merrill Lynch. An arbitration panel ruled last month that Merrill Lynch must repay Mr. & Mrs. Mirabelli more than $1.2 million in damages and fees for providing inappropriate investment advice to them. The Financial Industry Regulatory Authority (FINRA) arbitration panel awarded the full amount of the Claimants’ out-of-pocket losses. The Claimants received their entire initial investment, as well as all legal fees and associated arbitration costs. The panel basically put the Mirabelli’s back in a position that they would have been in had they never met the Merrill Lynch adviser.
The Mirabelli’s invested all of their liquid assets, about $1.8 million, with Merrill Lynch in early 2008. The advisor then put those assets into his team’s income portfolio, which was made up of 33 dividend-paying growth stocks. Because the account was collateralized through loans, if the value of the account fell below $1 million in value, the Mirabellis would need to sell out of the securities held in the accounts. That is what happened in November 2008, amid an industry-wide meltdown of financial markets. The Mirabelli’s suffered a loss of about $800,000.
It was contended that Merrill Lynch put the Mirabelli’s assets in “inappropriate” investments and recommended the purchase of “unsuitable securities.” The arbitrators obviously agreed with the Claimants. Barry Lax, a lawyer with Lax & Neville, a firm located in New York City, represented the Mirabellis and did a very good job.
Source: Insurance Journal
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