By Suzanne Barlyn
Feb 21 A sports agent, whose company represents star clients including Denver quarterback Tim Tebow, won $400,000 in a ruling against brokerage Morgan Keegan & Co, due to personal losses from bad bond investments.
It was a partial victory for Memphis-based sports agent W. Kyle Rote Jr., who co-founded Athletic Resource Management with a roster of clients that have included former Chicago Bulls forward Scottie Pippen and football player Michael Oher.
Rote and his wife, Mary Lynne, sought $954,000 when they filed the case against Morgan Keegan in 2009, according to a ruling Friday by a Financial Industry Regulatory Authority arbitration panel.
Rote is now retired from his role as the agency's chief executive, according to his profile on LinkedIn. He founded the company in 1984 with its current president and prominent sports agent Jimmy Sexton. Morgan Keegan bought the company in 1995.
Rote is also known as a player in the North American Soccer League during the 1970s. Rote, son of former New York Giants football star Kyle Rote Sr., is the only U.S.-born player in the soccer league's history to win the scoring title, according to U.S. Soccer, the sport's governing organization in America.
Rote , in his recent case, alleged that Morgan Keegan, a unit of Regions Financial Corp, failed to disclose the extent of risk involved in his personal investments and breached its contract.
His losses stemmed from a group of money-losing bond funds that became the subject of state and federal regulatory actions. Morgan Keegan, which is being purchased by Raymond James Financial Inc, settled with the SEC in 2011 for $200 million.
While the arbitration panel found the brokerage liable in Rote's case, it awarded Rote less than half the amount he initially sought, according to the ruling. The Memphis-based panel did not give reasons for its decision, as is typical of FINRA arbitration rulings.
Morgan Keegan sold Athletic Resource Management to another agency in 2010. By that time, some of the agency's clients were involved in legal disputes with the brokerage about the funds. They include former Chicago Bulls forward Horace Grant. He has a pending case in federal court after Morgan Keegan tried to overturn a $1.46 million arbitration ruling on his behalf in 2009.
The ruling is among the first in favor of a Morgan Keegan employee, according to Peter Mougey, a lawyer in Pensacola, Florida who represented Rote.
It shows the extent to which the brokerage left even its own employees in the dark, Mougey said. "Morgan Keegan misled its own employees and failed to relate vital information," he said.
A Morgan Keegan spokesman declined to comment.