NEW YORK — Anthony J. Amaradio, a highly successful Orange County life insurance salesman accused of defrauding customers, was fined $535,000 on Monday and permanently banned from the securities industry.
The action by a disciplinary committee of the National Assn. of Securities Dealers stemmed from NASD accusations that the Irvine-based salesman deceived unsophisticated investors into believing they were buying investments similar to mutual funds instead of life insurance policies. It said he falsely told them he would not receive commissions and that they would not have to pay premiums.
In the 1980s, Amaradio was Equitable Life Assurance's highest-producing salesman. He was later a top salesman for Prudential Insurance. He was the subject of a 1993 article in The Times, which reported that Amaradio had advertised heavily on Christian radio stations in Southern California and his home state of Michigan, offering retirement investments.
Co-workers said Amaradio, 44, often prayed with customers before having them sign the new policies. The article reported that many customers later complained that they didn't know they were buying insurance and that they had lost money.
The fine and ban, all relating to Amaradio's activities while with Equitable, were imposed by the NASD's District 8 business conduct committee in Chicago. It called Amaradio's actions "egregious and severe" and said they amounted to "a pattern of misconduct that caused substantial damage to numerous public customers over an extended period of time." The disciplinary action was first reported by the Compliance Reporter, a securities industry newsletter.
Laurence S. Schultz, Amaradio's lawyer, said he will appeal the decision to the NASD's National Business Conduct Committee. A hearing on the appeal is scheduled for April.
Schultz called the local committee's decision "an egregious abuse of discretion" and added, "We fully expect it will be overturned on appeal." A secretary in Amaradio's Michigan office said he was on vacation in Israel and could not be reached for comment.
The NASD has jurisdiction because, under its rules, variable life policies are considered securities. Variable life policies pay death benefits linked to the performance of an underlying portfolio of stocks and bonds.
An official at Michigan's Insurance Bureau said the state is still proceeding with an effort to revoke Amaradio's insurance license, a move that could automatically lead to his being banned from selling insurance in California.
Michigan formally filed in 1994 to revoke his license. But Ian McLauchlan, compliance officer for the Michigan bureau, said final action in the case had been delayed because the bureau needed time to investigate a large number of additional customer complaints against Amaradio.
Amaradio is contesting the Michigan action.
In 1993, Equitable agreed to pay a $1.5-million fine and settled NASD charges that it had failed to supervise Amaradio. Equitable fired Amaradio in 1991, but Prudential Insurance quickly hired him. A Prudential spokesman said last year that Amaradio had left Prudential voluntarily at the end of 1994.
California and Michigan insurance officials said Amaradio is registered to sell life insurance for more than a dozen insurance companies. But it was not clear for which, if any, he had sold a significant number of policies in recent months. Schultz declined to comment.
NASD documents say Amaradio is president of his own investment advisory firm. His firm, AJA Financial/Securities America, has offices in Irvine and near Detroit.