FINRA ARBITRATION PANEL AWARDS RECORD-SETTING $3 MILLION TO ROCHESTER-AREA EGG-FARMING FAMILY VICTIMIZED BY CONVICTED AXA FINANCIAL ADVISOR

PWCK Law Firm Cautions that Problems with AXA and AXA Brokers in the Fitzpatrick Case are Just “Tip of the Iceberg”; 81-Year-Old Widow Lost Entire Life Savings to Same AXA Broker.

ROCHESTER, N.Y. – May 1, 2019 – A FINRA arbitration panel has awarded more than $3 million to an Alleghany County egg-farming family swindled in a variable annuity (VA) and life insurance scheme promoted by a former AXA financial advisor who was recently convicted for stealing from another elderly AXA client. The Whitesville, NY, victims were represented in the arbitration proceeding by the Peiffer Wolf Carr & Kane law firm (PWCK).

 

The award is believed to be the largest ever paid in upstate New York and also the largest imposed on AXA in arbitration.

 

The elderly victims oversaw the successful Fitzpatrick Poultry Farm in Whitesville, NY, for many years before suffering millions of dollars in damages at the hands of AXA and its financial advisor, Francesco Puccio, formerly of Webster,  NY. Puccio was affiliated with the AXA office in Rochester.

 

At a news conference today, PWCK released a FACT SHEET showing a disturbing pattern of AXA problems throughout Rochester, Syracuse, Buffalo, and upstate New York.  The PWCK fact sheet documents multiple complaints, settlements, regulatory actions and fines involving AXA and AXA brokers, including the victimization of 81-year-old Scottsville, NY, widow Shirley Kerwin, who lost her entire life savings to the same AXA broker who cheated the Whitesville egg-farming family.  Puccio was later found guilty of stealing from Kerwin.

 

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Bad Brokers in the News

PWCK Partner Jason Kane said: “AXA sent a felonious broker to serve unsophisticated and elderly clients and then completely abdicated its supervisory obligations. Nonetheless, an unrepentant AXA contended throughout the arbitration that everything was ‘perfectly suitable’ and ‘beyond reproach.’ This elderly couple may have had wealth, but they did not have investment savvy. AXA and Puccio took them to the cleaners by recommending obviously unsuitable variable annuities and life insurance policies.”
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The elderly victims suffered millions of dollars in damages at the hands of AXA and its financial advisor, Francesco Puccio. Puccio was affiliated with the AXA office in Rochester, New York.

“I’m not happy at all about the way AXA treated us,” said Sandra Fitzpatrick, one of the egg-farming family victims. “We’ve learned that you can’t just trust anybody. You have to be careful, and you have to ask before you sign any papers. You have to find out what you’re signing them for. That’s something that we didn’t do because we trusted the person AXA sent to our door. We thought he was going to be honest. I would like to warn other people to know what you’re signing.”
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PWCK Managing Partner Joseph Peiffer said: “This arbitration award sends a strong message to AXA and other financial giants that they are responsible for the conduct of the financial advisors to whom they lend their names. The definition of a suitable investment is not whatever some felonious broker can talk somebody into buying. If there are no rules of the road that AXA and other companies recognize, it will not take long before individual investors lose even more faith in a system that all too often fails them.”

Speaking to her separate claim against AXA,

The widow Shirley Kerwin said: “When Puccio stole my money, I was shocked. I turned to AXA. When they refused to help, I was devastated. And, I knew that I had to take action to protect myself and anyone else out there that was harmed by AXA.”
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The egg-farming couple fleeced by Puccio did not understand the nature of the variable annuity and life insurance products in which they invested millions of dollars. In what should have been a clear sign of their lack of sophistication, the Fitzpatricks were found to have earlier insurance policies stacked in egg carton boxes and did not seem to be aware they existed.  Instead of helping them, Puccio rolled those old policies into newer and larger ones that paid hefty commissions to him.  The total commissions paid out in just one year to Puccio was well over $200,000.

 

One of the more damning moments of the arbitration hearing occurred when Puccio was caught impersonating a Fitzpatrick family member on an audio recording and then had to admit he established a fraudulent email account to pose as the eldest member of the family.  That same day he sold yet another life insurance policy to the Fitzpatricks.

Shirley Kerwin v. AXA

Press Conference Documents.

A short video overview of the Fitzpatrick case.

B-roll footage of the Fitzpatricks for TV station use.

Peiffer Wolf Carr & Kane has extensive experience in handling investment fraud cases in upstate New York and across the U.S.

 

AXA:  ONLY THE TIP OF THE ICEBERG SEEN SO FAR IN NEW YORK STATE CUSTOMER COMPLAINTS?

 

AXA is a company that is particularly dependent on variable annuity (VA) sales.  According to published data, the company’s $373 million in VA revenues in 2017 accounted for 47 percent of total revenues, ranking AXA #4 in the nation.

 

As one consumer watchdog told Congress:  “Award-winning personal finance writer Liz Pulliam Weston has called variable annuities ‘the worst retirement investment you can make.’ Another industry commentator has called them ‘one of the most overhyped, most oversold, and least understood investment products.’ And one analyst, who each year compares the performance of variable annuities to an alternative approach using low-cost index funds, estimates that variable annuities transfer approximately $25.6 billion a year ‘of spendable investment returns’ from vulnerable investors to the insurance industry and its sales force.”

Not surprisingly, AXA’s emphasis on pushing VAs on unwary investors has triggered widespread concerns, including from New York regulators:

In 2014, AXA was the subject of the largest fine ever levied by the New York State Department of Financial Services for failing to report changes in its variable annuity structure. The fine was $20 million.

In 2010, the New York State Department of Insurance fined AXA $1.9 million for violations, including making inaccurate or incomplete disclosures to consumers buying replacement annuity contracts and life insurance policies.

In addition, AXA has consistently attracted the attention of the industry self-regulatory organization FINRA:

Oct. 2015: FINRA Orders an Additional Five Firms to Pay $18 Million in Restitution to Charities and Retirement Accounts Overcharged for Mutual Funds: http://www.finra.org/newsroom/2015/finra-orders-5-firms-pay-18-million-failing-waive-fund-sales-charges

Sept. 2007: FINRA Fines AXA Advisors $1.2 Million for Fee-Based Account Violations, Orders Return of $1.4 Million in Fees to Approximately 1,800 Customers: http://www.finra.org/newsroom/2007/finra-fines-axa-advisors-12-million-fee-based-account-violations-orders-return-14

July 2009: FINRA Permanently Bars Broker Operating Ponzi Scheme Involving Customers of Broker-Dealers: http://www.finra.org/newsroom/2009/finra-permanently-bars-broker-operating-ponzi-scheme-involving-customers-broker

Feb. 2004: NASD Fines AXA Advisors $250,000 for Failure to Waive Sales Charges on Customers' Mutual Fund Transfers: http://www.finra.org/newsroom/2004/nasd-fines-axa-advisors-250000-failure-waive-sales-charges-customers-mutual-fund

But it is two recent cases – the new $3 million arbitration award to retired egg farmers in Whitesville, NY, and a pending case involving the entire life savings of an 81-year-old widow in a suburb of Rochester, NY. – point to serious problems in upstate New York that may only be the tip of the iceberg of AXA sales abuses related to annuities.

 

Compounding the problem is that AXA has shown no hesitancy to employ or extend the employment of problem brokers with troubled backgrounds:

Current AXA broker in Buffalo, NY, Ronald Hicks, has eight customer disputes, four financial liens and one criminal disclosure in his records.

Current AXA broker in the Utica area, Richard Hazard, has eight customer disputes (six related to VA and/or life insurance policies). Publicly available records indicate AXA and/or Hazard has paid out over half a million dollars to settle those disputes.

There is troubling additional evidence that consumers in the Buffalo/Rochester/Syracuse region are being exposed routinely by AXA to other brokers with backgrounds that raise multiple red flags.  According to Broker Check records available online from FINRA:

Brokers currently registered in AXA’s Rochester operation have four annuity and life insurance disputes and one criminal disclosure.

Brokers currently registered in AXA’s Buffalo operation have 15 annuity and life insurance disputes and other disclosures, three criminal disclosures and 11 financial lien disclosures.

Brokers currently registered in AXA’s Syracuse operation have seven annuity and life insurance disclosures, one criminal disclosure and over 15 financial lien disclosures.

MEDIA CONTACT:  Max Karlin, (703) 276-3255 or mkarlin@hastingsgroup.com.  

 

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Peiffer Wolf Carr & Kane has helped thousands of investors who have suffered substantial losses. If you have Variable Annuities or Life Insurance Products in your investment portfolio, Contact Us by calling 585-310-5140 or by filling out an online Contact Form for a FREE Consultation.

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