FINRA

Orlando was named a respondent in a FINRA complaint alleging that he improperly obtained control over the finances of his member firm's customer, an 81-year-old widow. The complaint alleges that Orlando obtained a durable power of attorney (durable POA) and a health power of attorney (health POA) over the customer. Orlando used his position of trust to become the executor of the customer's will, named as the beneficiary of her bank account, and named as the primary beneficiary of her will, with his wife named as a contingent beneficiary. Orlando failed to disclose these arrangements to the firm, which prohibited its representatives from serving in a fiduciary capacity for, or its representatives named as the beneficiary of the account of, anyone other than a family member. The complaint also alleges that Orlando advised the customer to surrender a variable annuity (VA) she held with the firm, claiming that she needed to do so in order for him to assist her with personal financial matters. Orlando recommended that the customer surrender the VA without having a reasonable basis to believe that the transaction was suitable for her. The recommendation was unsuitable in view of the customer paying sales charge of $30, a Guaranteed Minimum Income Benefit (GMIB) rider charge of $479, a withdrawal charge of $3,440, as well as the loss of the $626.91 monthly automatic withdrawal payments she had been receiving and the future income she would have received as a result of purchasing the GMIB. When making the recommendation, Orlando failed to take into account the surrender and other charges, as well as the customer's reliance on the VA for income. The complaint further alleges that contrary to the firm's policies, Orlando maintained two pre-signed forms that were, except for a date and/or contract number, blank and incomplete. Orlando maintained a VA withdrawal and a request for electronic transfer of funds forms that he had the customer signed, in the customer's file in his office.

Decision

Bar (Permanent)

All capacities

Indefinite

3/16/2020

Monetary Penalty other than Fines

$7,693.86

$1,630.20

Restitution

$4,000.00

Hearing Panel decision rendered January 29, 2019 wherein respondent is barred from association with any FINRA member in all capacities, ordered to pay $4,000, plus interest, in restitution to the customer and ordered to pay hearing costs of $7,693.86, which includes a $750 administrative fee and $6,943.86 for the cost of the hearing transcript. The sanctions are based on findings that Orlando engaged in unethical conduct by betraying the trust of an elderly customer and assuming control over her finances. The findings stated that Orlando used his position of trust to lead the customer into giving him authority to make medical decisions for her, encouraged her to grant him power of attorney for financial matters, name him as executor in her will, and name him as primary beneficiary of her will. Orlando failed to disclose these arrangements to his firm. Orlando drove the customer to her bank and accompanied her inside when she made him the beneficiary of her bank accounts and surreptitiously drove the customer to two attorneys she did not know rather than explain his concerns about her sons to her long-time legal advisor. Furthermore, Orlando talked about the customer with both attorneys, outside of her presence and directed one of the law firms to make Orlando's wife the primary beneficiary of the customer's estate if Orlando predeceased the customer. The findings also stated that Orlando recommended that the customer surrender a variable annuity without having a reasonable basis to believe that the recommendation was suitable. The recommendation was unsuitable in view of the customer paying a sales charge of $30, another charge of $479, a surrender fee of $3,440, as well as the loss of a monthly $626.91 payment and the opportunity for future income. When making the recommendation, Orlando failed to take into account the surrender and other charges, as well as the customer's reliance on the variable annuity for income. The findings also included that Orlando maintained in his customer files pre-signed blank customer forms, a variable annuity withdrawal form and a request for electronic transfer of funds form. On February 14, 2019, Orlando appealed the decision to the NAC. The sanctions are not in effect pending the review. NAC decision rendered March 16, 2020. The sanctions were based on findings that Orlando engaged in unethical conduct by betraying the trust of an elderly customer and assuming control over her finances. The findings stated that Orlando used his position of trust to lead the customer into giving him authority to make medical decisions for her, to grant him power of attorney for financial matters, to name him as executor in her will, and to name him as primary beneficiary of her will. The findings also stated that Orlando recommended that the customer surrender a variable annuity without having a reasonable basis to believe that the recommendation was suitable in light of the incurred surrender fees and costs of more than $3,900, as well as the loss of a monthly $626.91 payment and the opportunity for future income. The findings also included that contrary to his member firm's policies, Orlando maintained in his customer files pre-signed blank customer forms, a variable annuity withdrawal form and a request for electronic transfer of funds form. The decision became final April 20, 2020.

I DISCOVERED FINANCIAL FRAUD PERPETRATED ON FORMER CLIENT AND I DISCLAIMED ANY BENEFICIAL INTEREST FROM FORMER CLIENT. I DID NOT MAINTAIN INCOMPLETE VA WITHDRAWAL FORMS OR INCOMPLETE ELECTRONIC TRANSER FORMS NOR DID I SURRENDER FORMER CLIENT'S ANNUITY WITHOUT REGARD TO SUITABLITY. I RECEIVED NO COMMISSION FROM SALE OF ANNUITY. MOREOVER, I NEVER IMPROPERLY GAINED CONTOL OVER MEMBER FIRM'S CUSTOMER'S FINANCES AND NEVER ACTED ON ANY DURABLE POWER OF ATTORNEY OF FORMER CLIENT.

CUSTOMER ALLEGED THE VARIABLE ANNUITY PURCHASED FROM THE REPRESENTATIVE IN JANUARY 2013 WAS MISREPRESENTED AND NOT APPROPRIATE. CUSTOMER HAS ALLEGED DAMAGES FOR THE WAIVER OF SURRENDER CHARGES AS NOTED BELOW.

$7,000.00

JOHN HANCOCK DISTRIBUTORS

Discharged

NOT PROVIDED FAILURE TO PROVIDE BROKER DEALER WITH WRITTEN NOTIFICATION OF OUTSIDE BUSINESS ACTIVITY.

THE N.A.S.D. TOOK NO ACTION AGAINST ME. JOHN HANCOCK TERMINATED MY N.A.S.D. LICENSE WITH THEM. HOWEVER MY COMPLIANCE MANUEL AT JOHN HANCOCK STATED NOTHING ABOUT WRITTEN NOTIFICATION. IN ADDITION I TOLD TOLD MY GENERAL AGENT AT HANCOCK I HAD INCORPORATED ORLANDE & ASSOCIATES WITHIN A WEEK OF INCORPORATION. MOREOVER MY CORPORATION WAS LISTED IN THE PROVIDENCE JOURNAL & PROVIDENCE BUSINEES JOURNAL.