Constructive Fraud Allegations
The widow of Roy Speer, who co-founded the Home Shopping Network has brought a lawsuit against Morgan Stanley, seeking to recover over $170 million to her late husband’s estate for various violations of the federal Securities Exchange Act and Florida law. Her filing with the Securities Exchange Commission claims that Morgan Stanley, acting through a Florida advisor and branch manager in Palm Harbor, conducted “excessive trading, unauthorized use of discretion, undue influence, negligence and negligent supervision, constructive fraud/abuse of fiduciary duty, unjust enrichment,” along with several other violations.
Similar claims have been brought against these same Florida Morgan Stanley agents, alleging that they carried out unsuitable and unauthorized trading after the account advisor allegedly suffered from diminished capacity, and the branch manager failed to supervise the advisor.
Breach of Fiduciary Duty as Constructive Fraud
In relationships that involve special trust and confidence, including those shared between investment advisors and their clients, special obligations called fiduciary duties are owed by the advisor. Fiduciary duty demands that an investment adviser act in the best interest of his or her clients. By law, the interests of the client must be put ahead of those of the advisor at all times. Fiduciaries must also exhibit loyalty and care in all of their actions carried out on behalf of the client.
If a fiduciary duty is breached, depending on the circumstances, it could be considered fraud. Even if the situation does not appear to involve deception on its face, it can be interpreted as constructive fraud. Constructive fraud involves performing duties recklessly, while people who believe that the duties have been performed and who rely on their performance are misled. Unlike standard fraud, constructive fraud does not need to involve knowledge of a misrepresentation.
Being charged with fraud by the Securities Exchange Commission is a serious matter, regardless of how the Commission attempts to prove it. If you suspect that you are being investigated by the SEC, for fraud or breach of your fiduciary duties to clients, seek counsel from an experienced federal defense attorney immediately. Don’t try to talk with law enforcement officials before consulting with a lawyer who knows how to best protect your interests.
Often, in white collar criminal prosecutions, investigations are ongoing for months or even years before charges ever surface. Jeffrey S. Weiner will work tirelessly to get to the bottom of your case. We can work with prosecutors to reduce or avoid charges being filed, while keeping the investigation out of the public eye as much as possible.
Contact an Experienced Florida White Collar Criminal Defense Attorney
Allegations of fraud or any other white collar crime can jeopardize your professional license, in addition to leading to huge fines, asset forfeiture, and severe prison sentences. If you have been contacted or questioned by federal prosecutors, or have been charged or arrested in Florida, contact the law office of Jeffrey S. Weiner. P.A. in Miami at 305-670-9919 for counsel and representation from a dedicated criminal defense attorney.