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Miniaci family wins $1M award against Morgan Keegan & Co. Read Facebook Discussed Emailed

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The prominent Miniaci family of Broward
More problems for developer Pugliese
County recently won a judgment of more than
$1 million against Morgan Keegan & Co. for See More Most Read Articles
losses suffered in mutual funds when the risks
of those funds were not properly disclosed,
according to a complaint filed in Fort
Lauderdale federal court.
The claims made in the Miniacis’ arbitration
case echoed those made on a national level
by the Financial Industry Regulatory Authority
(FINRA) in April.

The Miniacis’ attorney, Jeff Sonn of Sonn &

Erez , declined to comment on the case. The federal complaint spells out the claim that was
made to arbitrators and the award that was granted.

According to the complaint, Morgan Keegan recommended that the Miniacis invest in various
Morgan Keegan-branded mutual funds, and the family suffered losses of about $1 million.

The complaint said the Miniacis discovered Morgan Keegan had misrepresented and failed to Free Research
disclose the true nature of the bond funds.

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An e-mailed response from Morgan Keegan said the company believes the FINRA allegations are
erroneous, and that its marketing materials disclosed the risk of investments, and that FINRA Outsourcing Application Management Provided Predictability
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In June 2010, a three-member FINRA panel heard the parties’ evidence and argument in Fort Stock Market Outlook
Lauderdale. On June 9, the panel ruled Morgan Keegan was liable on claims of negligent
supervision and unsuitability, and should pay the award. Details of the award were outlined as See More Whitepapers
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Rose Miniaci, as trustee of the Rose Miniaci Revocable Trust: compensatory damages in the
amount of $292,009.
Beatriz Miniaci, as trustee of the Beatriz Miniaci Revocable Trust: compensatory damages in the South Florida Real Estate
amount of $195,717.
Dominick Miniaci, as trustee of the Dominick Miniaci Revocable Trust: compensatory damages in
the amount of $205,199. Featured Property
Albert Miniaci, as trustee of the Albert Miniaci Revocable Trust: compensatory damages in the Price: $899,000
amount of $286,962. Building Size: 2,548 SF
Paramount Vending: compensatory damages in the amount of $100,219.37, inclusive of interest. Use Type: Sale
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Albert Miniaci is a well-known developer of restaurants and resorts in Fort Lauderdale, and has
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The complaint to confirm the arbitration judgment also said Morgan Keegan was found not liable on
a claim for violation of the Florida Securities and Investor Protection Act.

In April, FINRA said it filed a complaint against Morgan Keegan, charging the firm with marketing
and selling seven affiliated bond funds to investors using false and misleading sales materials –
costing investors well over $1 billion. In addition to an unspecified fine, FINRA ordered
disgorgement of ill-gotten profits and full restitution for affected investors.

According to a FINRA news release, from Jan. 1, 2006, through Dec. 31, 2007, Morgan Keegan
sold more than $2 billion of the bond funds.

According to the release, the funds were heavily invested in risky structured products – particularly
in subordinated tranches of asset- and mortgage-backed securities, including subprime products.

“Those investments caused the funds to experience serious financial difficulties beginning in early
2007, and led to their collapse later that year,” the FINRA release said.

The FINRA complaint was filed with its Office of Hearing Officers. It alleged that the misleading
sales materials, combined with the firm’s misleading and deficient internal guidance and failure to
train brokers about the risks, led Morgan Keegan brokers to make material misrepresentations to
investors.
According to the FINRA complaint: “This was particularly acute with respect to one of the funds –
the Regions Morgan Keegan Select Intermediate Bond Fund – which was marketed as a relatively
safe and conservative fixed-income mutual fund investment when, in fact, the fund was exposed to
undisclosed risks associated with its investment in mortgage- and asset-backed securities and
subordinated tranches of structured products.”
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Fort Lauderdale securities attorney Mark Tepper represents others suing over similar allegations.

“Misrepresenting the risks associated with an investment is a fairly common claim made by
customers,” he said. “Well-known clients are difficult to represent because many arbitrators look at
wealthy investors, and they perceive they must be sophisticated to have obtained this wealth, even
though that is not always the case.”

Even so, having a high-profile client can also mean a large firm is more eager to settle, rather than
risk a high-profile loss that is mentioned in the media, Tepper said.
 0

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