Widow of Home Shopping founder sues Morgan Stanley for $400M

The widow of cable shopping pioneer Roy M. Speer, who co-founded the Home Shopping Network, is suing Morgan Stanley Wealth Management along with an adviser and branch manager for $400 million, according to her lawyer.
Morgan Stanley acknowledged the arbitration claim in a disclosure in the brokerage’s annual financial report filed with the SEC in March, but indicated the amount was for more than $170 million.
But the damages could be much higher, according to a statement by Scott ILgenfritz of Johnson, Pope, Bokor, Ruppel & Burns. He said the plaintiffs are asking for $100 million in damages and $300 million in punitive damages.
Lynnda L. Speer, Mr. Speer’s widow and personal representative of Mr. Speer’s estate, is claiming that Morgan Stanley and an adviser in the Palm Harbor, Fla., branch engaged in excessive trading, unauthorized use of discretion, and abused their fiduciary duty, according to the SEC filing.
Later in life, Mr. Speer suffered from “significant diminished capacity,” and during the last five years of his life, his adviser and others at the firm made approximately 12,000 unauthorized trades generating some $40 million in commissions, according to Mr. ILgenfritz’s statement.
The complaint, which was filed with under the Financial Industry Regulatory Authority Inc.’s arbitration forum, names adviser Ami Forte and branch manager Terry McCoy, according to the filing.
According to Morgan Stanley’s filing, Ms. Speer is asking for damages in excess of $78 million for violations of Florida Statute Chapter 517, which governs securities transactions. The claim also seeks portfolio damages of $55 million to $66 million and disgorgement and excess commission damages from $37 million to $44 million.
“I am committed to seeking justice for the exploitation of Roy and for the damages suffered by Roy’s charitable foundation and the Speer family trust,” Ms. Speer said in the statement.
A spokeswoman for Morgan Stanley, Christine Jockle, wrote in an emailed statement that the firm is fighting the allegations and that the claims are “without merit.”
“We are contesting them vigorously through the legal process,” she said.
Mr. Speer, who co-founded the Home Shopping Network in 1982, was estimated to be worth $775 million by Forbes in 2003. He died in 2012 at age 80.
The arbitration began in January 2015 and is scheduled to conclude sometime in July, according to the filing. News of the disclosure was first reported by the Tampa Bay Times.
Additional details about the suit were not available as only the final decisions and not the complaints are made public under Finra’s arbitration system.
However, both Ms. Forte and Mr. McCoy had the same customer dispute dated March 12, 2013 and listed as pending on their BrokerCheck records. The claimants, who are not named in the description on BrokerCheck, accused Ms. Forte of unsuitable and unauthorized trading in the account after the owner “allegedly suffered from diminished capacity.”
Mr. McCoy is accused of failing to supervise the claimant’s financial adviser, according to BrokerCheck.
Ms. Forte was named as the top financial adviser in Florida in 2013 by Barron’s, which reported her assets under management at almost $2.4 billion. She has been in the industry since 1994 and has no other publicly disclosed complaints or regulatory events on her BrokerCheck record, according to Finra’s website.