The High Cost of Ami: Morgan Stanley Client Ends Arbitration Marathon with $475M Claim
Ami Forte has been on the leaderboard many times throughout her 16 years at Morgan Stanley, but she may be weeks away from achieving a top ranking that she and the brokerage giant could do without.
In its annual 10-K statement filed last week with the Securities and Exchange Commission, Morgan Stanley said that the estate of Home Shopping Network co-founder Roy Speer has lifted damages it is seeking in a Finra arbitration claim to around $475 million. That is up from $170 million that Morgan Stanley cited last year in a separate regulatory filing and from $400 million that Speer’s attorneys were seeking seven months ago.
Speer, who died in 2012, was a long-time client of Forte, the estate’s lawyers have said, and had an affair with his broker from the mid-1990s through his senescence.
Arguments in the arbitration hearings ended last week, and a decision is likely to be announced imminently, said Scott Ilgenfritz, a Tampa, Fla.-based plaintiff’s lawyer who represents the Speer estate.
He estimated that Forte generated annual revenue of 4.6% to 4.8% on the $175 million in assets that Speer had in his Morgan Stanley accounts, largely through high turnover that generated huge commissions. Such a return compares with a general industry average of around .75%, he said.
A spokeswoman for Morgan Stanley declined comment, and Forte did not return a call for comment.
Morgan Stanley has previously said that the claims were without merit and that it planned to “contest them vigorously.”
Securities lawyers said Morgan Stanley would not have mentioned the case in its recent 10-K unless the payout were potentially material to shareholders.
The filing does not mention Forte by name, but said that the estate and widow Lynnda Speer allege excessive trading, unauthorized use of discretion, undue influence and negligent supervision, among other causes of action.
“Plaintiffs are seeking approximately $475 million in disgorgement, compensatory damages, statutory damages, punitive damages and treble damages under various factual and legal theories,” it said, without elaborating on a likely outcome.
The bulk of the claim derives from punitive damages equivalent to three times the approximately $118 million in compensatory damages that the Speer estate seeks, Ilgenfritz said. The tally has climbed steadily over two years and 139 sessions of arbitration hearings.
“Certainly we don’t expect the full measure of damages,” Ilgenfritz said of the $475 million claim. “Nobody expects full measure of damages in these Finra arbitration proceedings….We feel reasonably confident that we’ll get an award in our clients’ favor, we just don’t know how much.”
Forte, who began her brokerage career at Prudential Securities in 1994, joined what was then Morgan Stanley Dean Witter in 2000, according to her BrokerCheck filing. Based in Palm Harbor, Florida, she has consistently ranked as “one of the few female members” of Morgan Stanley’s Chairman’s Club for top producers since 2001, according to a blurb that had been posted on her company profile website but is no longer live. It noted that she had ranked as one of Barron’s Top 100 Financial Advisors for six consecutive years beginning in 2007 and as the Number One broker for two years running in its Top 100 Women Financial Advisors” rankings.