Ezra Shaw/Getty ImagesA three-member arbitration panel awarded Doug Mirabelli, seen in 2001, more than $1.2 million.
Nearly five years after he earned his second World Series ring, Doug Mirabelli has another big win.
This month, an arbitration panel ruled in favor of Mr. Mirabelli, the former Boston Red Sox catcher, in his dispute with one of Bank of America Merrill Lynch’s top financial advisers. The panel also awarded Mr. Mirabelli, 41, and his wife, Kristin, more than $1.2 million in damages and fees.
The decision was the second defeat for the adviser, Phil Scott, in the last 12 months. A second set of clients, John, Natalie and Harriet Baker, won $880,000 in damages against Mr. Scott in June.
Arbitrators ruled in favor of Mr. Scott in a third case in August. Another case, filed in April, is pending, according to records from the Financial Industry Regulatory Authority.
The two defeats are a blow to Mr. Scott, a 27-year veteran of Merrill and one of the most acclaimed members of its vaunted “Thundering Herd” of 15,000 brokers. Mr. Scott was ranked the 33rd top broker in the country and the top adviser in Washington State last year by Barron’s, managing about $1.1 billion in client assets.
“He’s had a long and distinguished career as a financial adviser,” said Bill Halldin, a spokesman for Merrill.
The case pressed by Mr. Mirabelli, who was the personal catcher for the pitcher Tim Wakefield and is now a real estate agent in Michigan, is unusual in some ways. Mr. Mirabelli and his wife invested $880,219 in March of 2008 with Mr. Scott, who put the money into the Merrill Lynch Phil Scott Team Income Portfolios, a collection of 33 dividend-paying growth stocks. They took out loans that made the account worth about $1.8 million. The loans were made on the condition that the account not dip below $1 million.
By November 2008, the Mirabellis’ account had fallen below that level, forcing them to sell the portfolio to cover the loans amid markets battered by the financial crisis.
In the arbitration case, lawyers for the Mirabellis argued that Mr. Scott had put his clients’ money into unsuitable investments, specifically an all-growth-stock portfolio. They also argued that he had failed to properly brief the Mirabellis on the loans and their requirements.
The three-member panel ruled in favor of the Mirabellis, awarding them their original investment and, in an unusual move, also awarding them all of their legal fees and arbitration costs.
“For Merrill, two awards is fairly significant,” said Barry Lax, a lawyer for the Mirabellis and the Bakers. “That the Mirabellis got all their money back shows that they had a really strong case.”
Mr. Halldin, of Merrill, said: “We disagree with the panel’s decision given the facts presented in this case. This account was handled properly during a very difficult time when there was extreme market volatility.”
Merrill has moved to vacate the award given to the Bakers, essentially appealing the case. The firm has argued that the arbitration panel did not take into account recommendations by Mr. Scott that the Bakers not sell their holdings near the bottom of the post-crisis markets.
Merrill has not yet decided whether to do the same for the Mirabelli case.
Article source: http://feeds.nytimes.com/click.phdo?i=2b32577c188329f219f619f6a241ad2c
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