Morgan Stanley, Ami Forte Ordered to Pay $34 Million in Speer Case
(Updates throughout with additional information.)
Morgan Stanley, financial advisor Ami Forte and her branch manager have been ordered to pay $34 million to the estate of Home Shopping Network co-founder Roy Speer because of unauthorized trading and other violations, according to the claimant’s attorney Scott Ilgenfritz.
A Financial Industry Regulatory Authority arbitration panel on Monday awarded almost $32.8 million in compensatory damages to the estate and an affiliated foundation, he said. It also awarded $1.5 million in costs, while attorneys’ fees will be determined later in court.
Morgan Stanley, Forte and her branch manager in Palm Harbor, Florida, Terry McCoy, were held jointly responsible for the award.
“Morgan Stanley is disappointed by the result and does not believe the award is justified,” spokeswoman Christine Jockle said in a statement. “Although disappointing, it is a small fraction of the more than $476 million sought by the claimants. Even so, the award is inconsistent with substantial evidence showing that the accounts were profitable for the client and managed in accordance with his wishes.”
The Finra arbitration panel denied the Speer estate’s claims for punitive damages. The complainants had asked for $118 million in compensatory damages and around triple that amount in punitive damages, which they said were required by Florida statutes relating to elder abuse. Forte is alleged to have had a multi-year affair with Speer, who was 80 when he died in 2012.
“The panel declined to award punitive damages, and curiously, even though it found liability for churning and unauthorized trading, they denied the claim for state securities statute violations,” Ilgenfritz said.
“I am very pleased the arbitrators realized Ms. Forte and her colleagues at Morgan Stanley breached their fiduciary duties to Roy and his foundation, and exploited him during a time of his continuing mental and physical decline,” Lynnda Speer, the late executive’s widow, said in a prepared statement.
The arbitrators denied Forte and McCoy’s requests for expungement of the violations from their Finra records. The three-person panel of public arbitrators did not explain their decision, as is typical.
They presided over 142 hearing sessions since January 2015 and February 16, 2016.