An egg-farming family based in New York has been awarded $3.2M in its Financial Industry Regulatory Authority (FINRA) arbitration claim against AXA Financial. The claimants are an older couple, Sandra and James Fitzpatrick, who own Fitzpatrick Poultry Farm. They contend that Franceso Puccio, an ex-AXA Financial broker, placed their money into variable annuities (VA), which were unsuitable for them. Puccio has already been convicted for senior investor fraud involving another elderly client that was also with the firm.
The couple are claiming that they lost millions of dollars because of the way AXA and Puccio handled their funds. They contend that their money had been invested in mutual funds until Puccio moved their funds, as well as four life insurance policies, into VAs.
Puccio worked in the securities industry for 16 years. He was barred by FINRA in 2015 after he failed to turn over information and documents that the regulator had requested related to an investigation into whether he had converted monies from a non-customer. Puccio’s BrokerCheck record notes several customer disputes, with allegations including unsuitable investments sold to claimants, negligence, breach of fiduciary duty, misrepresentations, and omissions.
The former AXA Financial adviser was previously a registered broker with Cambridge Investment Research and CCO Investment Services. Puccio’s criminal fraud conviction is related to his handling of an 81-year-old widow’s funds. She lost her life savings.
Puccio is not the only current or former AXA Financial broker to come under fire for fraud allegations nor is this the first time that the brokerage firm has found itself facing claims. In 2014, ex-AXA Financial adviser, Dennis Wright, pleaded guilty to stealing over $1.5M from over 30 clients. That was the same year that the New York State Department of Financial Services fined the broker-dealer for not reporting its variable annuities structure. The following year, AXA Financial was told by FINRA to pay $600K in restitution to retirements accounts and charitable organizations affected by its failure to waive service charges for mutual fund sales when applicable.
VAs are not for all investors. Typically illiquid, these long-term investments tend to come with additional costs, such as sales charges, mortality charges, and other fees. Variable annuities can be high risk investments. Because of the commissions that they charge, an irresponsible broker may be incentivized to recommend a VA to an investor even when it is not in a particular client’s best interests.
It is important that a broker recommend an investment only if the security is suitable for the investor, meets the portfolio’s goals, and is aligned with the degree of risk that the client can handle.
Our broker fraud lawyers represent older investors, other retail investors, small businesses, retirement funds, charitable organizations, high net worth individual investors, and institutional investors who have suffered losses due to fraud or negligence. If you lost money on your investments that you suspect may be due to fraud or you were represented by an AXA Financial broker/a financial adviser from another brokerage firm, contact Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) today. Our investor fraud attorneys work with investors nationwide to recover losses.