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Widow of HSN co-founder Roy Speer awarded $34 million in suit against his former mistress

After more than 13 months of arguments, an arbitration panel appointed by the Financial Industry Regulatory Authority awarded more than $34 million in damages to the widow of Roy Speer, co-founder of the Home Shopping Network, in a suit that pitted her against her late husband's former mistress.

Lynnda Speer, 75, who lives in Pasco County, sued Morgan Stanley Wealth Management, financial adviser Ami Forte and Palm Harbor branch manager Terry McCoy for the mismanagement of her late husband's finances. Speer, whose wealth once topped $1 billion and landed him on the Forbes 400 list of the richest Americans in 2000, died in 2012 at the age of 80 after years of deteriorating mental and physical health.

The arbitration panel found that Morgan Stanley, Forte and McCoy were guilty of elder exploitation, breach of fiduciary duty, constructive fraud, unauthorized trading and churning, as well as negligence. Morgan Stanley managed Roy Speer's accounts that ranged in size from $150 million to $200 million depending on the stock market's value. Speer's volume of trading activity on his accounts took off long after his health declined and after he had handed over much of his fortune to Forte, a high-profile stockbroker with whom he was intimately involved, said Guy Burns, managing partner of the local law firm Johnson, Pope, Bokor, Ruppel & Burns, which represented Lynnda Speer.

From Tampa Bay Times Business columnist Robert Trigaux: Inside a messy battle over Morgan Stanley's handling of HSN founder's fortune

Over the last five years of Roy Speer's life, Forte and her colleagues at Morgan Stanley put through more than 12,000 unauthorized trades in Roy Speer's accounts, including charitable and family trust accounts, Burns said.

"Morgan Stanley contested everything we said. We couldn't put a comment or sentence together without them contesting," Burns said. "We fought tooth-and-nail, and after 13 months of hearing every defense they could put up, we were gratified that the panel said they believed there was exploitation."

After years of investigation and 70 days of hearings over 13 months, the arbitration panel ruled in favor of Lynnda Speer, who is legally the personal representative of Roy Speer's estate. In addition to the award of $32,840,000 in damages and $1,547,777 in additional costs, Burns said he expects to win "several million dollars more" for legal fees when the issue is brought to court.

"Morgan Stanley does not believe the award is justified. While disappointing, it is a small fraction of the more than $476 million sought by the claimants," said James Wiggins, spokesman for Morgan Stanley. "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. It is also notable that the arbitration panel rejected in its entirety claimants' demand for punitive damages."

Forte's license as a financial adviser was not affected by the ruling.

Lynnda Speer was married to Roy Speer for 52 years.

"I am very pleased the arbitrators realized Ms. Forte and her colleagues at Morgan Stanley breached their fiduciary duties to Roy and his foundation and exploited him during a time of his continuing mental and physical decline," she said in a statement. "We are hopeful the outcome of this case will prevent other elderly investors from being taken advantage of by their stockbrokers."

Contact Justine Griffin at jgriffin@tampabay.com. Follow @SunBizGriffin.

Widow of HSN co-founder Roy Speer awarded $34 million in suit against his former mistress 03/21/16 [Last modified: Tuesday, March 22, 2016 12:15pm]
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