An arbitration panel has awarded more than $34 million to the estate of the co-founder of the Home Shopping Network, finding that bank Morgan Stanley, along with its broker and branch manager, engaged in unauthorized trading, breach of fiduciary duty/ constructive fraud, negligence, negligent supervision and unjust enrichment. Arbitrators additionally concluded the bank violated Florida law against exploitation of vulnerable adults.
These damages involve actions over a three-year period from 2009 to 2012, and involve investments in banking and financial services. At the time, the decedent was alive, but suffering from severe dementia, of which he died in 2012, according to InvestmentNews.com. The bank insists there was evidence the accounts were profitable and were managed in accordance with their client’s wishes, a view clearly not shared by arbitrators. Decedent’s widow stated her primary hope was that the case would spur greater protections for elderly investors.
Good probate litigation attorneys in Fort Lauderdale know that so often, we don’t recognize an elderly loved one is being financially exploited until after the individual dies. Although the aforementioned case is unique in terms of the scope of the exploitation, the circumstances themselves aren’t all that rare, and we’re likely to see quite a bit more cases in the coming years, as the American population ages.
As noted in a recent report by Business Insider, we’re on the verge of one of the greatest transfers of personal wealth from one generation to the next, with baby boomers estimated to transfer some $30 trillion to surviving family members over the next two-to-three decades. Some estimates are even higher, and it’s expected these transfers might occur more than once, as family members age.
The lure of this money attracts of course legitimate tax planners and financial advisers, but also predatory actors – even some who may be affiliated with larger and legitimate firms.
The Florida Bar indicated attorneys are likely to see an uptick in the number of cases arising out of pre-death financial exploitation of the elderly, with remedies available under civil law under Florida’s Adult Protective Services statutes, found in Florida Statute Chapter 415. This law allows victims of financial exploitation to seek compensation and accountability for these acts.
Florida has the highest percentage of people over 65 in the nation, accounting for just about one-fifth of our population. That figure is growing. Those who exploit aren’t limited to those providing professional services, but also can include parents, spouses, adult children, relatives, joint tenants, caregivers or anyone owing a legal or fiduciary relationship to the individual (i.e., guardian, trustee, conservator, attorney, etc.).
One challenge in these cases will be determination of who is a “vulnerable” adult. For instance, we may know that an individual was diagnosed with Alzheimer’s or dementia, but determining the exact onset of those conditions and pinpointing when the individual was “vulnerable” could prove challenging.
Many of these claims will involve assertions of undue influence and elder financial abuse. Undue influence involves a type of coercion wherein a person in a position of trust abuses that trust and compels the individual to act in a manner that may not reflect their own free will. If the probate court finds a contract or agreement was made that involved undue influence, that contract can be deemed void.
Call Fort Lauderdale Injury Attorney Richard Ansara at (954) 761-4011. Serving Broward, Miami-Dade and Palm Beach counties.
Additional Resources:
Finra panel orders Morgan Stanley to pay $34 million to estate of former Home Shopping Network chief, March 22, 2016, By Mark Schoeff Jr., InvestmentNews.com
More Blog Entries:
Settling an Estate With No Will in Florida: Intestate Succession, Jan. 25, 2018, Fort Lauderdale Probate Litigation Attorney Blog