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.
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.