A Morgan Stanley wealth manager who had an affair with a client could cost the bank $400 million

[FLPanhandle]

http://finance.yahoo.com/news/morgan-stanley-wealth-managers-affair-143523831.html



A high-flying Morgan Stanley investment adviser, Ami Forte, has the bank facing an enormous fine, a source says.
The fine would be the result of a lawsuit filed against the bank by the widow of a multimillionaire client.

The widow is Lynnda Speer, who was married to Roy Speer, cofounder of the Home Shopping Network. He died in 2012. Now Lynnda Speer says the bank overcharged her husband while he was alive.

To complicate matters, there is this: Roy Speer and Forte were having an affair. It started in 1998.

Details of the affair came out in a Financial Industry Regulatory Authority (FINRA) hearing taking place in Florida this month.

A source present at the FINRA hearing says Morgan Stanley could be on the hook for a $400 million loss: $100 million in compensatory damages, and an additional $300 million in punitive damages.

According to an earlier report, Morgan Stanley believed it might be on the hook for a lot less — only $170 million.

The reason the fine may end being bigger than expected is because of a state statue in Florida, the Florida Elder Exploitation Law.

The law allows for punitive damages for exploitation of the elderly. Toward the end of his life, Speer suffered from declining mental and physical health, requiring him to delegate oversight over financial matters to others, including Forte.

"During the last several years of his life, Roy Speer suffered from significant diminished mental capacity, as well as from substantial physical infirmities,” said a representative from Johnson Pope Bokor Ruppel & Burns LLP, lawyers for Lynnda Speer. "He was wheelchair bound and diapered, could not drive, and was attended to daily by a full-time caregiver.”

Lynnda Speer’s lawyers say that from March 2007 until after Speer’s death in 2012, Morgan Stanley, through Forte, allegedly “put through approximately 12,000 unauthorized trades in Mr. Speer’s accounts, generating commissions of nearly $40 million,” according to the law firm’s statement, which was provided to Business Insider.


Just when I thought bankers couldn't be more unscrupulous...

[CBGLuthier]

1. In related news Morgan Stanley will be raising their fees.

Banks never pay.

[dawg]

2. The affair shouldn't be material to the suit against Morgan Stanley.

I'm fairly certain the bank didn't encourage her to do that.

But everything else is emblematic of the systemic problems and abuses in our financial system.

Personally, I'd like to think a woman I was having an affair with would have treated me better.

[Fumesucker]

3. You just about choked me

I have a cold and laughing that hard was painful and got me coughing...

/Wipes tears and

[marble falls]

4. The Morgan Stanley investment stategy seems to be fuck them first, then screw them.

[FLPanhandle]

5. LOL

Perfect!

[Fritz Walter]

6. They make money the old-fashioned way: They EARN it!

In 2009, ShitiBank sold 51% of Smith Barney to Morgan Stanley.

Now I understand what John Houseman was talking about in 1979:

All I ever got from my Morgan Stanley broker was a Christmas card... and an annual fee statement that went up each year.