Broker Suspended for Recommending Unsuitable Investments to Elderly Florida Investor
On October 7th, 2017, FINRA’s Department of Enforcement announced sanctions against registered securities broker Walter Marino (CRD#: 2121623). While not admitting to any of the misconduct, Mr. Marino consented to the penalties, which included a one-year suspension from the securities industry.
According to FINRA investigators, Mr. Marino negligently recommended wholly unsuitable investments to one of his elderly Florida clients. Unfortunately, as a result of this broker’s misconduct, this investor sustained substantial (avoidable) financial losses. In this post, our experienced Miami unsuitable investments lawyers explain what happened in this case.
Unsuitable Investment Recommendations: Variable Annuities
Case Background
The investor in this case was a retired Florida school teacher who was in her late 70s. When working with registered financial advisor Walter Marino, this investor stated that her objectives were:
- Safety of principal; and
- Moderate growth.
In 2012, Mr. Marino recommended that this investor put nearly $1.1 million of her money into a variable annuity with a five-year maturity date. Notably, there were annual administrative fees of 1.25 percent associated with this investment, and there were also steep surrender penalties, in the event that the investor sold the product before the maturity date.
Negligent Early Replacement of Investment
In early 2014, less than two years after the original variable annuity was purchased, Mr. Marino recommended that this investor cash out, and replace the investment with a different, though somewhat similar, variable annuity. The investor listened to his advice. Though, she was not informed that doing so would trigger a massive 7 percent early surrender charge. Based on her investment, FINRA determined that she was forced to pay more than $82,000 in early surrender fees, none of which was ever disclosed to her by Mr. Marino.
The Broker Received a Large Commission
Why would a financial broker recommend that an investor buy a variable annuity with a five-year maturation period, only to instruct that investor to then sell the investment at a steep cost just 18 months later? A notable clue is that Mr. Marino received $50,000 as a commission payment as a result of this investor selling her original variable annuity and using the money to purchase a different one.
At best, Mr. Marino was negligent; at worst, he was trying to take advantage of his client for the purposes of self gain. After reviewing all financial records, FINRA determined that there was no valid strategy-based reasoning behind Mr. Marino’s recommendations. As such, the investor was a victim of an unsuitable investment, and was entitled to financial compensation for her damages.
Contact Our Miami Securities Fraud Lawyers Today
At Carlson & Associates, P.A., our Miami investment fraud lawyers have handled many unsuitable investment cases. If you lost a substantial amount of money because of your broker or brokerage firm’s misconduct, we can help. From our office in Miami, we represent clients in unsuitable investment claims from the United States and Latin America, including Brazil, Peru, Dominican Republic, Venezuela, Columbia and Mexico.
Resource:
brokercheck.finra.org/individual/summary/2121623
