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

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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