FINRA Panel Awards Estate Over $34M from Morgan Stanley in the Wake of Churning Allegations
A Financial Industry Regulatory Authority arbitration panel awarded the estate of Home Shopping Network Roy M. Speer over $34M in its case against Morgan Stanley (MS). The panel ruled that the firm, branch manager Terry McCoy, and broker Ami Forte were jointly liable for breach of fiduciary duty, negligence, unauthorized trading, constructive fraud, unjust enrichment, and negligent supervision. The alleged negligence would have occurred from 1/09 to 6/12 and involved investments in the financial services and banking sectors.
According to Mrs. Speer’s lawyer, in six of Mr. Speer’s accounts, about 12,000 transactions took place, most of them involving municipal bond trading and corporate trading. Many of these trades were unauthorized.
The arbitrators awarded $32.8M in compensatory damages to Speer’s widow, Lynnda Speer, and $1.5M for the costs involved in the arbitration process. The panel said that Morgan Stanley violated a law in Florida that prohibits the exploitation of vulnerable adults. Mr. Speer had dementia. Forte, who was his broker, is said to have been in a relationship with him.
Former Craig Scott Capital Broker Accused of Elder Financial Fraud
FINRA is accusing broker Edward Beyn of making over $1.7M in commissions and fees by engaging in excessive trading in client accounts while he was a registered representative at Craig Scott Capital. He is now with Rothschild Liberman. Beyn is accused of churning nine accounts of six customers, all of them over the age of 60, from 3/12 through 5/15. They all sustained losses.
The regulator said that Beyn’s short-term trading strategy involved quick turnovers of the accounts so he could earn substantial commissions. He bought and sold companies’ equities, releasing earnings reports to spur excessive churning.
$10M Ponzi Scam Allegedly Offered Bridge Loans to Jamaican Businesses
The U.S. Securities and Exchange Commission is charging Mark A. Jones with running a $10M Ponzi scam. According to the regulator, Jones sought to make money from offering bridge loans to businesses in Jamaica.
The regulator contends that Jones started soliciting investors as early as 2007. He claimed their money would be used for bridge loans to the businesses waiting for funds from commercial bank loans. Investors were told the loans would make them 15-20% interest yearly.
Jones raised approximately $10M from at least 21 investors in a number of states. He marketed the investment opportunities via YouTube and met with locals in Jamaica claiming he had funded local projects. Investor funds were used to pay other investors and cover Jones’ personal spending. Many of the investors bilked were retirees who are now in financial trouble because he handled their investors. The SEC’s Boston Regional Office contends that Jones used investor money for other purposes rather than the touted bridge loans, including making payments that typical of a Ponzi scam.
Our elder financial fraud lawyers represent older investors and their families against brokerage firms, investment advisers, and financial representatives. We are here to help our clients recoup their losses.
Morgan Stanley penalized for advisor fraud, ducks huge fine, CNBC, March 22, 2016
Finra alleges broker took in more than $1.7 million in commissions churning accounts at Craig Scott Capital, Investment News, March 17, 2016