Monday, July 16, 2018
Business

Ex-Morgan Stanley broker Ami Forte should face discipline, regulatory authority recommends

Former Morgan Stanley star broker Ami Forte, whose affair with Home Shopping Network co-founder Roy Speer led to a $32.8 million judgment against Forte and her former firm, should be disciplined for potential violations of securities rules, the Financial Industry Regulatory Authority has recommended.

The authority, known as FINRA, is a non-government, not-for-profit organization authorized by Congress to protect investors by writing and enforcing rules governing the activities of thousands of broker-dealers and more than 600,000 brokers nationwide.

Last month, the authority made public the fact that a notice had been issued recommending disciplinary action against Forte in matters governed by three different securities rules: one regarding the handling of discretionary accounts, one requiring brokers to make recommendations suitable to their clients and one requiring brokers to observe high standards of commercial honor and equitable principles of trade.

The notice, disclosed on FINRA’s BrokerCheck website, said an investigation is pending but did not indicate what penalties Forte could face.

"FINRA has not specified what the charges are, and, frankly, we do not believe that any charges that they may want to level are valid, because Ms. Forte was not managing Mr. Speer’s accounts at the time in question," said Forte’s attorney, Robert Pearl, who has offices in Naples and New York.

Rather, he said, for the last several years that Speer had accounts with Morgan Stanley they were "traded by other people and supervised by other people."

Forte has cooperated fully, has nothing to hide and will not admit to doing something she didn’t do, Pearl said.

"We’re going to be defending her against these charges," he said. "They don’t have any merit, and we do not believe that they should be brought at all."

Morgan Stanley Wealth Management discharged Forte in March 2016, the same month a three-member FINRA arbitration panel ruled that Morgan Stanley, Forte and Morgan branch manager Terry McCoy were guilty of elder exploitation, breach of fiduciary duty, constructive fraud, unauthorized trading and churning Speer’s accounts, along with negligence, negligent supervision and unjust enrichment.

PREVIOUS COVERAGE: When Morgan Stanley’s Ami Forte met HSN founder Roy Speer, it soon became a tale of greed

The panel heard from 35 witnesses and reviewed boxes of evidence before awarding $32.8 million to Speer’s widow, Lynnda Speer, plus costs of $1.5 million and legal fees.

The case focused on an affair that Forte and Speer began in the late 1990s, when she was working for Bank of America and he was among the Tampa Bay area’s richest men.

Forte secured Speer’s personal brokerage business, worth an estimated $150 million to $200 million, and took it with her when she began at Morgan Stanley.

Until Speer died in 2012 at age 80, Forte often met with him weekly at a second home he kept for entertainment. The relationship lasted into his last few years as his memory failed and health problems required him to wear a diaper.

In Speer’s last five years, his accounts, controlled by Forte, engaged in 12,000 transactions that generated nearly $40 million in commissions. It wasn’t until after Speer’s death that his widow gained full control of his brokerage account.

Forte later challenged her termination, saying "it’s just not right," and that she had been a loyal employee who had stood by the company when times were tough. FINRA’s records indicate that she is not currently registered as a broker.

In her claim, Forte said she ended her relationship with Speer five years before he died and before his mental setbacks. In his latter years, she also said she had turned the responsibility for handling Speer’s money over to another Morgan Stanley broker, Chuck Lawrence.

FINRA records show that Lawrence, now a broker with R.F. Lafferty & Co. in Oldsmar, also has received a notice with the same investigative case number as Forte’s. Morgan Stanley Wealth Management discharged Lawrence, who did not respond to voice mail messages left on a cell phone and with another broker in Lafferty’s Oldsmar office, on the same day as Forte.

MORE: Go here for more Business News

Times senior news researcher John Martin contributed to this report. Contact Richard Danielson at [email protected] or (813) 226-3403. Follow @Danielson_Times

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