The widow of Home Shopping Network co-founder Roy Speer wants Morgan Stanley to repay her $170 million in damages, alleging excessive trading, abuse of fiduciary duty and other charges, the firm revealed in an SEC filing.
Lynnda Speer also names Morgan advisor Ami Forte and her branch manager Terri McCoy, both of Palm Harbor, Fla., in the complaint that she filed as a representative of her late husband's estate.
In the case, Speer is seeking more than $78 million in damages for alleged violations of Florida law, as well as managed portfolio damages of at least $55 million and damages relating to excess commissions and sales credit damages of at least $37 million.
FINRA's arbitration board, which held an initial hearing in January, is expected to rule on the case by July, according to Morgan Stanley's filing.
EXCESSIVE TRADING, FIDUCIARY BREACH
Morgan Stanley identifies the full range of allegations in its SEC filing: "excessive trading, unauthorized use of discretion, undue influence, negligence and negligent supervision, constructive fraud/abuse of fiduciary duty, unjust enrichment," and violations of Florida law.
In an email, Morgan Stanley spokeswoman Christine Jockle dismissed the Speer's lawsuit as baseless.
"We believe the claims are without merit and we are contesting them vigorously through the legal process," Jockle says.
Messages left for both McCoy and Forte seeking comment were not immediately returned.
PREVIOUS FINRA CASE
Forte and McCoy are both veterans of the financial service industry, each with more than 20 years of experience and registered as brokers and advisors with the SEC, FINRA and in dozens of states.
A complaint on FINRA's BrokerCheck dating back to 2013 alleges on behalf of an unnamed claimant that Forte "engaged in unsuitable and unauthorized trading in various accounts ... after the authorized person on the accounts allegedly suffered from diminished capacity."
The same complaint charges that McCoy, a branch manager, "failed to supervise" the advisor.
In its SEC filing, Morgan Stanley only provides details of the Speer case, though it notes that lawsuits and regulatory scrutiny pose an increasing burden in the financial services sector.
"Over the last several years, the level of litigation and investigatory activity (both formal and informal) by government and self-regulatory agencies has increased materially in the financial services industry," the company says.
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This story has been updated to correct an error in an earlier version calling the complaint a lawsuit.