As reported in the Chicago Tribune, former Chicago Bull Horace Grant won a $1.46 million arbitration award against Morgan Keegan & Co. for losses in some bond mutual funds.

The award represents nearly all of the unrealized losses Grant allegedly suffered as of January 2008.

Grant, who played with the Bulls from 1987 to 1994 when they won three NBA championships, had alleged that Morgan Keegan, a Memphis, Tenn.-based broker, sold him four high-yield bond funds with more risk in them than he was told. Morgan Keegan marketed the funds as conservative investments appropriate for retirees who were looking to protect their principal.

In 2007, the four funds plummeted by an average of 58 percent, according to Grant’s complaint filed in March 2008 with the Financial Industry Regulatory Authority, or Finra, which runs the arbitration forum for investors. Similar bond funds lost 6.9 percent that year, the complaint said.

The Morgan Keegan funds were clobbered by the meltdown in sub-prime residential mortgages, largely because they invested in risky debt-related securities and other mortgage-related holdings. The complaint alleged that Morgan Keegan failed to disclose the funds’ large concentrations of such securities, an allegation that the brokerage firm had denied.

The FINRA arbitration panel did not provide any reasons for finding in favor of Grant, who did not return phone calls seeking comment. Grant, who lives in California , retired in 2004 from the Los Angeles Lakers. Morgan Keegan said in a statement that “arbitration cases turn on their individual facts and we don’t agree with the outcome.”

The brokerage firm, a unit of Regions Financial Corp., a bank based in Birmingham , Ala. , faces a flood of arbitration claims from investors related to its high-yield bond funds. Investors in the funds reportedly lost more than $2 billion in 2007.

A Morgan Keegan spokesperson said that investor claims have been denied in about half of arbitrations cases heard to date. FINRA has so far heard 57 Morgan Keegan cases related to its high-yield mutual funds.

Last year, complaints involving mutual funds outnumbered complaints involving stocks for the first time, according to FINRA statistics. The phenomenon has continued so far this year, as last year’s bear market shattered belief that mutual funds that invest in bonds or other fixed-income products were less volatile than stocks.

If you have questions about bond mutual fund investments you made or investments you made with Morgan Keegan, or if you believe that you have been the victim of a securities fraud, The White Law Group may be able to help. To speak to a securities attorney, please call our Chicago office at 312-238-9650 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, visit http://whitesecuritieslaw.com.