Finra issues complaint against broker for unsuitable variable annuity sales

Walter Marino allegedly profited from advising elderly clients to buy new contracts

Apr 26, 2017 @ 1:53 pm

By InvestmentNews

The Financial Industry Regulatory Authority Inc. has issued a disciplinary complaint against former broker Walter Marino for recommending exchanges of non-qualified variable annuities to two customers without having a reasonable basis for recommending the transactions.

Mr. Marino was a broker at Legend Equities Corp., a Palm Beach Gardens, Fla.-based broker-dealer then part of First Allied Holdings, during May and June 2014 when the allegedly unsuitable transactions occurred.

(More: Finra arbitration panel awards Wilbanks Securities investor $1 million for misleading sales pitch on variable annuity)

Finra charges that Mr. Marino received commissions of approximately $60,000 from the transactions while his customers received no benefit. In fact, Mr. Marino's customers suffered financial harm due to $82,523.23 in surrender charges paid, Finra said in a release. In addition, Finra claims Mr. Marino failed to use the tax-free exchange provision available under Section 1035 of the Internal Revenue Code, causing his clients to incur significant tax liabilities.

As a result of Mr. Marino's conduct, Finra ordered him to fully disgorge all ill-gotten gains and make full restitution to his clients.

(More: Department of Labor's fiduciary rule blamed for insurers' massive hit to variable annuity sales)


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