Axa to Pay N.Y. Egg Farmers $3.2M in Finra Award

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By Jill Gregorie

May 3, 2019

Axa Advisors must pay $3.2 million to elderly egg farmers who claim they were sold unsuitable variable annuities and life insurance policies by a Rochester, N.Y.-based broker between 2011 and 2014, a Finra arbitration panel decided last week.

James and Sandra Fitzpatrick filed the claim in November 2016, and sought more than $13 million in damages, according to an April 25 Finra resolution. The couple runs the Fitzpatrick Poultry Farm in Whitesville, N.Y., a small town located approximately 100 miles south of Rochester.

The Fitzpatricks called a lawyer when they recognized their Axa broker’s “mug shot” in the Rochester Democrat & Chronicle, said Jason Kane, a partner at Peiffer Wolf Carr & Kane, in a YouTube video summarizing the case. Kane is one of three lawyers representing the claimants.

The July 2015 article included claims that Francesco Puccio and a close friend defrauded a client by liquidating her retirement accounts and investments, and then “systematically transferring the money through a series of unsecured loans and distributions.” Puccio worked for Invictus Wealth Management at the time, and was convicted of a felony.

The Fitzpatricks claim that Puccio sold them high-commission variable annuities and life insurance products in part to help pay off those bills, according to an affidavit. There were five questionable transactions in total, including a transfer of $708,000 in American Fundsmutual funds to an Axa annuity.

Another recommendation that Fitzpatricks’ lawyers said was unsuitable involved Puccio’s converting fully paid, dividend-producing life insurance policies into a $1,300,000 Transamerica variable annuity.

The Fitzpatricks also filed a claim involving Cambridge Investment Research, where Puccio worked between January 2014 and July 2015. They settled that case in 2016 for $115,000, according to Puccio’s broker conduct report.

Finra has barred Puccio from working as a broker, but the Fitzpatricks’ lawyer said he should have been closely monitored at Axa Advisors given his “numerous credit problems.”

“AXA sent a felonious broker to serve unsophisticated and elderly clients and then completely abdicated its supervisory obligations,” said Kane in a statement.

Police arrested Puccio for charges including grand larceny and conspiracy in 2015. Puccio worked at Axa between March 1999 and August 2009, then again between January 2011 and January 2014, Finra records show.

The Fitzpatricks at one point kept life insurance policies in egg carton boxes, a sign that they were not sophisticated investors, Kane’s law firm noted in the statement. As a result, Puccio was able to easily fleece his elderly clients.

“On its face, these products should have been questioned immensely by his branch manager,” Kane said in the YouTube video. “Red flags should have been going up everywhere in that office.”

Axa notes that Puccio has not been affiliated with the company for more than five years, and says that the company is “committed to serving our clients with integrity.”

“We do not condone any actions by this individual which were inconsistent with our policies and values,” a spokeswoman said in an e-mail response to questions.

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In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.