Legend Equities Corporation - Law Offices of Robert Wayne Pearce

Jul 17, 2017

Legend Equities to Pay More Than $2.3 Million in Restitution for Mutual Fund Overcharges

Legend Equities Corporation has agreed to pay more than $2.3 million in restitution to customers who were overcharged in certain mutual fund purchases. According to the Financial Industry Regulatory Authority (FINRA), between July 1, 1009 and January 1, 2017, Legend Equities disadvantaged certain retirement plan and charitable organization customers that were eligible to purchase Class A shares of certain mutual funds without a front-end sales charge. The customers were instead sold Class A shares with a front-end sales charge or Class B or C shares with back-end sales charges and higher ongoing fees and expenses. According to the Letter of Acceptance, Waiver and Consent (AWC) submitted to FINRA, Legend Equities failed to reasonably supervise the application of the sales charge waivers to the eligible mutual fund sales, relying on its financial advisors to determine the applicability of sales charge waivers. Further, Legend Equities allegedly failed to adequately notify and train its financial advisors regarding the availability of mutual fund sales charge waivers for eligible customers. Without admitting or denying the findings, Legend Equities was censured and agreed to pay restitution to eligible customers who were overcharged of an estimated $2,300,188.00, the amount eligible customers were overcharged, inclusive of interest.

Legend Equities Broker Named in FINRA Complaint for Unsuitable Annuity Replacements

Walter Marino, a previously registered broker with Legend Equities Corporation, was named a Respondent in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he recommended unsuitable variable annuity replacements (also known as exchanges) to two customers, allegedly causing one customer to incur a surrender charge of $85,523.23. According to the FINRA complaint, Walter Joseph Marino, of Dix Hills, New York, had no reasonable basis for his recommendation of replacements for his customers’ non-qualified variable annuities. The complaint alleges that both customers suffered substantial losses as a result of his recommendation. For instance, one customer incurred significant tax liabilities due to Mr. Marino’s failure to use the tax-free exchange available under the IRS Code. Further, as mentioned above, another customer is alleged to have suffered a surrender charge of more than $85,000. Mr. Marino, on the other hand, allegedly received commissions of approximately $60,000 for recommending the unsuitable transactions.