According to InvestmentNews, the widow of Roy M. Speer, co-founder of the Home Shopping Network, has filed a complaint with The Financial Industry Regulatory Authority (FINRA) against Morgan Stanley Wealth Management along with an adviser Ami Forte (Forte) and branch manager Terry McCoy (McCoy) for $400 million. Morgan Stanley acknowledged the arbitration claim in a disclosure in the brokerage’s publicly filed annual financial report but only indicated the amount in controversy was for more than $170 million.
Mr. Speer’s widow is claiming that Morgan Stanley and their adviser engaged in excessive trading – also referred to as churning, unauthorized use of discretion, and abused their fiduciary duty. According to the complaint, Mr. Speer suffered from diminished capacity during the last five years of his life. During this time his adviser and others at the firm made approximately 12,000 unauthorized trades generating an eye popping $40 million in commissions.
Unfortunately, cases such as these are becoming increasingly common. Our firm has handled a number of cases where a wealthy investor has been taken advantage of due to diminished capacity. In other cases a spouse who inherits or assumes management over an affluent estate has very little financial experience and places their trust in their brokerage firm and financial advisor only to be charged millions in fees and high commission products. Often times these financial strategies are completely unreasonable and unjustifiable. Wealthy investors often have financial needs that do not exceed even a tiny fraction of their overall net worth. Yet, there have been cases where brokers place sizable portions of their client’s massive estates at jeopardy in order to generate millions in fees while providing absolutely no benefit for their client.
In the Speer’s case, the client is asking for damages in excess of $78 million for violations of Florida Statute Chapter 517, portfolio damages of $55 million to $66 million and disgorgement and excess commission damages from $37 million to $44 million. Morgan Stanley has stated that the firm is fighting the allegations and that the claims are “without merit.”
Ms. Forte was named as the top financial adviser in Florida in 2013 by Barron’s. Her assets under management at the time was almost $2.4 billion. Ms. Forte has been in the securities industry since 1994.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana LLP are experienced in representing investors in cases of unsuitable investments. Our consultations are free of charge and the firm is only compensated if you recover.