03 May Victimized Family Egg Farm Awarded Record-Setting $3 Million
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A FINRA arbitration panel has awarded $3.2 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). For more details about the case, go to www.brokerwatch.com/axa/upstate-ny.
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, N.Y., 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, N.Y., 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.
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.”
“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.”
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.”
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.
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