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Morgan Stanley Rep Won’t Pay A Dime Of $34 Million Arbitration Award

By George C. Miller, Esq.  of Shustak Reynolds & Partners, P.C. posted on Friday, April 29, 2016.

Earlier this month, we blogged about a recent $34 million arbitration award entered against Morgan Stanley and its former representative, Ami Forte, for engaging in unauthorized trading and churning brokerage accounts belonging to Roy M. Speer.  Speer was one of the billionaire co-founders of Home Shopping Network and a long-time client of Forte. Morgan Stanley summarily terminated Forte just two days after the arbitration award was issued. 

According to reports, Forte had engaged in a years long affair with the married Speer in the years leading up to his death.  While the affair was ongoing, Speer’s estate alleged Morgan Stanley and Forte made upwards of 12,000 unauthorized trades in Mr. Speer’s accounts, generating commissions of nearly $40 million.  Those commissions propelled Forte into Morgan Stanley’s “Chairman’s Club,” a recognition reserved for the firm’s top-producing wealth advisors. 

According to a recent regulatory filing, Morgan Stanley fired Forte for “allegations involving adherence to industry rules and/or firm policy including with regard to use of trading discretion and timely reporting of liens.”  Though once a top-producing advisor, Forte failed to report several tax liens on her Form U4 as required by industry rules.  According to recent reports, she also will not pay a dime of the $34 million arbitration award, which was issued “jointly and severally” against her and Morgan Stanley.  Forte’s failure to disclose her once clandestine relationship with her senior-citizen client also factored into the firm’s decision to terminate her.

Shustak Reynolds & Partners, P.C.’s California FINRA lawyers and securities lawyers focus on the securities industry and matters affecting broker-dealers, registered representatives and the financial services sector.  Contact us today for a free consultation. 

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