Walter Marino has come to our attention for issues concerning his variable annuity sales and large number of customer complaints. Marino most recently worked for Benjamin Securities, Lincoln Investments, Planmember and Legend Equities. If you wish to discuss your rights with an attorney call 1-866-817-0201 for a free consultation.
The most recent issue with Marino is a regulatory complaint filed against him by the securities regulator FINRA. This complaint constitutes the 16th “event” in the CRD record of Marino. An event on a CRD is an occurrence which reflects poorly on a broker’s ability to handle the funds of others. Events include terminations of employment, being sued by a customer/investor, being the focus of a regulatory action, and other similar black marks.
This most recent regulatory complaint involves the sale of variable annuities. In May and June 2014, Respondent Walter Marino recommended unsuitable replacements (also known as exchanges) of variable annuities to two customers without having a reasonable basis for recommending the transactions. An investment is unsuitable when the investment puts the interests of the broker ahead of that broker’s investor.
Marino received substantial commissions, approximately $60,000, from the unsuitable transactions. Marino’s investors, however, received no benefit from the exchanges Marino recommended. Indeed, both customers suffered financial harm due to the costs incurred as a result of the annuity replacements since the liquidation of annuities causes the investor to not only lose the substantial commissions and fees that the investor paid to get into the annuity, but the investor commonly incurs significant charges in liquidating the annuities.
Marino’s recommendation to one such investor resulted in that investor incurring an $82,523.23 surrender charge, a charge commonly assessed upon the liquidation of a variable annuity. In addition, switching annuities can have substantial tax ramifications. When Marino recommended replacing non-qualified annuities, Marino failed to utilize the tax-free exchange available under Section 1035 of the Internal Revenue Code (“1035 exchange”).
The new annuities that Marino recommended to replace those being surrendered also resulted in an increase costs to the investors. The increases included increases in annual mortality and expense charges, a new, advisory fees of 1.5%, and new surrender periods which decreased the ability to liquidate the annuities.
By recommending annuity replacements that benefit him but caused substantial financial harm to his customers, Marino violated regulatory rules that require him to sell suitable investments to his investors.
These issues should not be a surprise to those familiar with Marino’s history. The CRD of Marino indicates that he is an alumni of the Stratton Oakmont brokerage firm, the brokerage firm that was the focus of the film The Wolf of Wall Street.