The Financial Industry Regulatory Authority has filed a complaint against former MetLife Securities (now MML Investors Services LLC) advisor Peter Orlando for improperly obtaining control of his elderly client’s finances.
FINRA claims that Orlando obtained a durable power of attorney and a health power of attorney over his 81-year-old widowed client, in addition to being designated as the executor of her will and the beneficiary of her bank account. Orlando was also named as the primary beneficiary of her will, with his wife named as a contingent beneficiary.
FINRA alleges that Orlando failed to disclose these arrangements to MetLife, which only allows reps to serve in a fiduciary capacity or as an account beneficiary for family members.
FINRA also claims that Orlando advised his client to surrender a MetLife variable annuity so that he could assist with her personal financial matters.
During its internal investigation, MetLife claims it found two incomplete pre-signed customer forms in Orlando’s office, which is a violation of FINRA rules.
In a statement made on his BrokerCheck profile, Orlando noted that his client was a woman of “keen intelligence” and that, without his prior knowledge, he was listed as the beneficiary on the bank account because she was grateful that he discovered financial fraud perpetrated by a family member, which he reported to the police.
“I correctly surrendered her annuity on her instructions for no gain to myself and…never maintained two signed and blank forms, and was not power of attorney, or executor of the former client when she was a client,” said Orlando.
Orlando began advising the client in 2008, six years before her husband passed away, and had met with the couple on dozens of occasions at their home to discuss finances.
While her husband was still alive, Orlando recommended that his client invest in a MetLife variable annuity, which included a guaranteed minimum income benefit rider intended to meet her income needs as she aged.
As a result of the surrender, the client paid nearly $4,000 in charges and forfeited the $626.91 monthly automatic withdrawal payments she had been receiving, as well as the future income.
Months after her husband passed away, she moved to an assisted living facility and deposited approximately $350,000 into her bank account from the sale of her home.
The same day the Metlife variable annuity was closed, FINRA says that Orlando drove his client to the bank where she revoked powers of attorney previously assigned to her two sons, closed a joint account with one of her sons, and moved more than $372,000 to a new account. Orlando became the beneficiary of the bank account and would receive all of the funds upon her death.
Orlando claims that one son had said that he “wanted his mother dead,” according to his BrokerCheck profile.
The complaint alleges that Orlando recommended legal assistance for a conservatorship because he suspected, at that time, that she was not competent to handle her own affairs. Conservatorships were against Metlife policy, so Orlando assisted his client in procuring legal assistance to amend her power of attorney for financial and health decisions and revise her will.
The following month, the client’s family members learned of the beneficiary changes and took steps to remove Orlando from his new designations.
FINRA believes that Orlando acted unethically and made an unsuitable recommendation with respect to the variable annuity surrender.
Orlando resigned from MetLife in December 2014, while the firm was conducting its investigation.