A father-son advisory team in the Philadelphia area has won a half-million-dollar award from their former firm, Woodbury Financial Services, after an arbitration panel found that the two had been defamed by the broker-dealer.
Advisors Joseph Michael Cucinotta Sr. and his son, Cucinotta Jr., were both terminated in September 2021 by Woodbury, a subsidiary of the Advisor Group (whose name was changed last year to Osaic). After it fired the two men, Woodbury reported on their U5 termination forms that the reps had violated firm policy by submitting multiple applications to insurance firm Allianz for fixed-index annuities that the clients did not authorize. After the firing, the accusation made its way onto the Central Registration Depository maintained by the Financial Industry Regulatory Authority and from there onto the Cucinottas’ BrokerCheck pages, where the accusations became viewable by the public.
Both men responded with similar comments on the response section of their BrokerCheck pages: “I vehemently deny any wrongdoing,” wrote Cucinotta Sr., “and assert the allegations that led to my termination are completely without merit. The customers confirmed they not only received the investment documentation/disclosures, but also understood the benefits, associated risk and all relevant cost of the replacements in questions. At all times, I put the customer's interest first and I will vigorously pursue this matter to correct the record.”
That sentiment was vindicated by the Finra dispute resolution panel last week.
“The panel,” said the award, “credited the testimony of the claimants and the affidavits submitted stating that all 41 clients who opened accounts had been contacted and had agreed to the opening of accounts in order to take advantage of the specific Allianz opportunity relating to an annuity and the clients could resolve later whether to fund the accounts.”
“The gist of the case,” said the Cucinottas’ attorney, Michael Bessette at Colorado firm HLBS Law, “was that [Woodbury] made publicly available information found to be false and defamatory in nature and included information that was beyond the scope of what actually occurred.”
What will remain on the two brokers’ records, however, is a note saying they violated company policy. According to the Finra panel, the language will be changed in the case of both brokers to the following: that the two “electronically signed multiple client applications to open accounts in violation of the firm's policies and procedures.” Bessette would not comment on the distinctions between the new language and the now deleted reasons for termination.
Besides claiming defamation, the Cucinottas also accused Woodbury of fraud and causing them emotional distress, and they said the firm's actions interfered with their business relationships.
Osaic declined to comment on the matter.
Woodbury was told to pay $468,270 to the Cucinottas in compensatory damages, as well as another $31,000 for attorneys and expert witness fees, as well as a filing fee.
The two advisors had been at Woodbury since 2019. After leaving, they went on to work at Centaurus Financial, according to BrokerCheck. Cucinotta Sr. is the president of Independence Retirement Advisors in Radnor, Pa., while his son is listed as an investment advisor there.
Woodbury and other legacy brand names of the former Advisor Group were swept up into the Osaic brand as part of the giant broker-dealer's restructuring in 2023.