Securities Arbitration Lawyers BlogFINRA Bars Broker Adam Belardino After Employment Termination
Adam Belardino (Adam Gerard Belardino, CRD: #5221927) is a former registered broker and investment advisor whose last known employer was MML Investors Services, LLC (CRD#:10409) of Elmsford, New York.
His previous employers were MSI Financial Services, Inc. (CRD#:14251), also of Elmsford, Metropolitan Life Insurance Company (CRD#:4095) of Iselin, New Jersey, and Metlife Securities Inc. (CRD#:14251) of Shelton, Connecticut. He has been in the industry since 2007.
Termination
Massachusetts Mutual Life Insurance Company terminated Belardino’s employment on 3/25/2019 after a customer complaint launched an investigation. The original customer dispute, dated 3/18/2019, alleged that, “Beginning in November of 2018, the customers have alleged that the representative has misrepresented their account values, engaged in excessive levels of trading, and failed to comply with requests to have their accounts liquidated and the proceeds distributed.” The customers requested damages of $5,000.01, and the firm settled the claim for $1,537,066.34.
More Customer Disputes
After the post-termination settlement, other clients filed dispute claims against Adam Belardino. The first, on 4/18/2019, came with multiple allegations of unauthorized trading, the purchase of a Variable Universal Life (VUL) policy that was never discussed or authorized, invalid signatures on a pre-approvement check and other forms, and a surrender of the VUL policy without authorization, resulting in surrender fees. This case was settled for $6,782.69.
The next customer dispute, filed on 5/2/2019, alleged that Belardino “conducted unauthorized transactions and solicited new accounts under false pretenses using forged signatures.” These clients requested damages of $5,000.01, and the claim was settled for $69,407.68. A claim filed just a few days later, 5/9/2019, for similar reasons, was denied.
Nearly a year later, a new customer dispute, filed on 4/9/2020, alleged that Belardino “misrepresented the Variable Universal Life policy he purchased in 2017.” The client also stated that Belardino never fully explained the policy, or told him that failing to pay premiums would result in the loss of the policy’s values. The firm settled this claim for $51,133.06.
Most recently, a new client filed a dispute on 3/1/2021 indicating that in or around 2014, Belardino sold him Real Estate Investment Trusts (REITs) that were incompatible with his conservative investment portfolio objectives. No damages are listed, and this dispute is listed as “pending.”
FINRA’s Investigation Into Adam Belardino
FINRA first requested on-the-record (OTR) testimony from Belardino during an investigation after his termination of his employment from and by Massachusetts Mutual. The firm terminated him on 3/25/2019 during a review of multiple customer complaints.
Belardino was twice requested to provide testimony as requested, and his attorney cited his absence on medical reasons. FINRA staff offered rescheduling of both videoconference hearings. Part of his defense involved his inability to review and access relevant documentation to support and present his case. FINRA offered the opportunity to review this documentation during a videoconference. Even after consenting through his attorney, Belardino failed to attend both of the hearings. FINRA’s Enforcement Division then filed a Complaint that charged Belardino with violations of FINRA Rules 8210 and 2010 based on his failing to appear and give OTR testimony.
Because Belardino failed to offer any type of response, Enforcement filed a Motion for Entry of Default Decision, to which Belardino still failed to respond. Among the sanctions was a complete bar of association with any FINRA member in any capacity.
FINRA issued a Notice of Suspension on December 23, 2020, notifying him that he would be suspended effective January 19, 2021. Belardino filed a request with the Office of Hearing Officers for a hearing on the Notice of Suspension on January 15, 2021, but withdrew the request a month later.
On February 16, 2021, the Hearing Officer issued an order that made the order final and permanent. Belardino is now permanently barred from any association with any FINRA member.
The Risks Of Variable Universal And Other Life Insurance Policies
Has your broker suggested purchasing a VUL?
You may be wondering why a broker might be selling an insurance policy. Some brokers are actually licensed to sell insurance as well as securities and other investments. However, VULs and policies like it are not just for “insurance.” They’re also securities, just like stocks, bonds, and other financial investments. Here’s why.
Rather than investing in the markets directly, a VUL or IUL (Indexed Universal Life Insurance) invests the policy’s cash value directly into the market. In theory, the policy realizes a better return to the beneficiaries when the time comes for a death payout. These are different members of the family of “whole life” policies, which are usually the most expensive policies, but have some longevity.
With an IUL, the cash value is tied to an index, such as the Russel 500 or the S&P 500. However, it may also be tied to a different index, one you may not have heard of. There are also increased fees involved with one of these policies that could drain the policy’s value.
When the index drops, any associated fees could significantly impact the value of the policy to the point where it could be cancelled if you don’t answer a “premium call” to add more money to your account. This is similar to a “margin call” for your brokerage account when you buy securities on a margin. The result is that if you don’t add more money into your insurance account, the cash value goes down, you’ll lose the value of the policy as well as payments, and will likely be cancelled completely.
While an agent explains how these policies can “make money,” the projections are just that—projections. Events such as the COVID-19 pandemic can change everything overnight, and a policy can lose considerable value. Disruptors are not taken into consideration. Since the policy is intended to give a death benefit payout to its beneficiaries, the amount of that payout could be seriously impacted with such an event.
These types of policies are more complicated, and probably not suitable for the casual investor. We always recommend doing research and full due diligence, as well as ask questions before investing into any new and unusual security.
Did You Invest With Adam Belardino?
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345 and let us know how we can help.