Former Major League Baseball player Douglas Mirabelli and his wife, Kristin Mirabelli, won a major arbitration dispute with Merrill Lynch this week when a Financial Industry Regulatory Authority (Finra) Arbitration Panel ordered the firm to pay the couple more than $1.2 million for losses in their income portfolio, according to a Wednesday story in the Boston Business Journal (

The award came after the couple claimed that their income portfolio, made up of equities pledged against Merrill Lynch-owned mortgages, suffered losses that resulted in their liquidation in late 2008.

The Mirabellis' accounts were managed by Merrill Lynch's Phil Scott Team in Bellevue, Wash. In the case summary, the claim named financial advisor Phil Scott for providing "inappropriate investment advice" for socking Mirabelli's money into investments such as Alliance Resource Partners, Apollo Investment Corp. and Copano Energy LLC.

Scott was not named as a respondent in the case. However, this is the third arbitration case involving him this year. One panel ruled in his favor in August. Merrill Lynch is seeking to overturn a third one that went against him in June in an $880,000 decision.

"We disagree with the panel's decision given the facts presented in this case," Merrill Lynch spokesman Bill Halldin said about the Mirabelli decision. "This account was handled properly during a very difficult time when the market experienced extreme volatility."

"The panel awarded all of the requested relief that the Mirabellis were seeking," said John Miller, a partner at the Kansas City law firm Swanson Midgley LLC, who is representing the couple. "It's unusual in securities arbitration for a customer to receive the full relief that's requested, including interest and reimbursement of their costs of proceeding. That makes the outcome particularly gratifying here."

The amount of the award, decided by a Finra panel earlier this month, includes $800,219 in compensatory damages, plus 6% annual interest from July 26, 2010 until the award is paid. It also includes $47,340 in costs and $391,474 in attorneys' fees. Other relief, including punitive damages, was denied.

The Mirabellis brought the case to arbitration in July 2010, claiming violation of securities acts in Michigan and Washington, negligence, breach of contract and fiduciary duty, as well as misrepresentation and omission. They requested $1 million in actual and compensatory damages, as well as unspecified compensation for other damages, fees and costs.

Mirabelli was a catcher for 11 MLB seasons, playing for the San Francisco Giants, the Boston Red Sox, the Texas Rangers and the San Diego Padres.

--Jim McConville