Finra panel orders Morgan Stanley to pay $34 million to estate of former Home Shopping Network chief

Finra panel orders Morgan Stanley to pay $34 million to estate of former Home Shopping Network chief
A Finra arbitration panel sided with the estate of Roy M. Speer, the co-founder of the Home Shopping Network, saying the brokerage churned his account and violated a law against exploitation of vulnerable adults.
MAY 24, 2016
A Finra arbitration panel awarded more than $34 million to the estate of Roy M. Speer, the co-founder of the Home Shopping Network, in its claim against Morgan Stanley for churning Mr. Speer's account. The all-public arbitration panel ruled that Morgan Stanley, broker Ami Forte and branch manager Terry McCoy were jointly liable for unauthorized trading, breach of fiduciary duty/constructive fraud, negligence, negligent supervision and unjust enrichment. The arbitrators also found that Morgan Stanley violated a Florida law against exploitation of vulnerable adults. It awarded $32.8 million in compensatory damages to Lynnda Speer, Mr. Speer's widow and representative of the estate, as well as $1.5 million to reimburse costs incurred during the arbitration process, which spanned 13 months and involved 142 hearing sessions. The chair of the arbitration panel signed the decision on March 18. It was posted on March 21. Ms. Speer will next seek to recover potentially millions in attorneys fees in Florida court, according to her attorney, Scott Ilgenfritz, a partner at Johnson Pope Bokor Ruppel & Burns. The award covered a period from January 2009 to June 2012 and involved investments in the banking and financial services sectors. Mr. Ilgenfritz said there were about 12,000 transactions in six of Mr. Speer's accounts, 85% of which centered on corporate and municipal bond trading. “The unauthorized trading was rampant,” Mr. Ilgenfritz said in an interview. “They were trading individual bonds like pork bellies.” Mr. Speer, who died in August 2012, suffered from dementia, according to Mr. Ilgenfritz. He asserts that Mr. Speer was exploited by Ms. Forte, who was alleged to be in a relationship with Mr. Speer in addition to serving as his broker. Mr. Speer's estate sought $118.7 million in compensatory damages and $366 million in punitive damages. The arbitration panel denied the punitive damages as well as requests for expungement by Ms. Forte and Mr. McCoy. A Morgan Stanley spokeswoman said the award was not justified. “Although disappointing, it is a small fraction of the more than $476 million sought by claimants,” Morgan Stanley spokeswoman Christine Jockle said in a statement. “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.” Ms. Forte's attorney, Frederick Schrils, a partner at Gray Robinson, similarly said the accounts were handled “quite profitably” for Mr. Speer in a way that reflected “his wishes.” “While no amount was justified given the facts of this case, it bears noting that the amount actually awarded to the claimant represented a very small fraction of the alleged 'damages' requested by her attorneys at the close of the case,” Mr. Schrils said in a statement. Mr. Speer's widow hopes the case will lead to greater protections for elderly investors. “One of her goals in this whole process was to bring to light the financial abuse and elder abuse of her late husband and to prevent other brokers and investment advisers from taking advantage of their elderly clients,” Mr. Ilgenfritz said.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.