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World Group Securities, Inc. (WGS) is the exclusive broker-dealer affiliate of World Financial Group (WFG) and is a member of the AEGON Group.

Registration

World Group Securities, Inc. is registered with the Financial Industry Regulatory Authority (FINRA) to sell securities through World Financial Group associates in all 50 states plus Washington, D.C. and Puerto Rico under the CRD number 114473.[1] Its U.S. Securities and Exchange Commission (SEC) number is 8-53428.[1].

Their registered types of business includes:

  1. Broker or dealer selling corporate debt securities (for example, bond)
  2. Broker or dealer retailing corporate equity securities over-the-counter
  3. Government securities broker
  4. Mutual fund retailer
  5. Municipal securities broker
  6. Non-exchange member arranging for transactions in listed securities by exchange member
  7. Broker or dealer selling variable life insurance or annuities

Products

World Group Securities, Inc. distributes a wide array of securities products. These products are:

  • Variable products are variable annuities and variable life insurance contracts issued by insurance companies, some of which may be affiliated with WGS.
  • Mutual funds are investment company securities, some of which may be affiliated with WGS.
  • General securities are products which are cleared through the Company’s clearing firm. These products typically include corporate equity and debt securities traded on registered and over-the-counter (OTC) exchanges, U.S. government securities and municipal securities. These products may be held in cash or margin accounts. (Although certain mutual funds can also be purchased through the clearing firm, for purposes of these procedures such products will be considered to be mutual funds and not general securities.) A General Securities registration, or Series 7, is required in order to transact in “all” of the aforementioned products.

Business model

Being that World Group Securities is the exclusive securities channel for World Financial Group (WFG), only properly licensed and registered WFG representatives may represent World Group Securities.

History

World Group Securities was incorporated in Delaware, USA on 02/06/2001 in order to replace World Marketing Alliance Securities (WMAS) as servicing broker-dealer when the book of business generated by World Marketing Alliance (WMA) was bought out by AEGON and reassigned to the newly-created World Financial Group[2].

Lawsuits

Some state securities officials, including those in Iowa, Alabama, and Minnesota, have filed lawsuits to bar inappropriate sales practices by World Financial Group (WFG) and World Group Securities (WGS). In addition, a number of customers have filed private arbitration claims.[3]

A 2004 NASD disciplinary action report summarized disciplinary actions against World Group Securities. According to the report, WGS "submitted a Letter of Acceptance, Waiver, and Consent in which the firm was censured and fined $15,000. Without admitting or denying the allegations, the firm consented to the described sanctions and to the entry of findings that the firm permitted representatives to act in registered capacities while their registrations were inactive due to their failure to satisfy the Regulatory Element of NASD's Continuing Education Requirements. NASD also found that the firm failed to establish and maintain a supervisory system reasonably designed to assure compliance with the Regulatory Element of the Continuing Education Requirement by its registered representatives."[4]

In December 2006, World Group Securities and one of its brokers were fined $150,000 by Missouri's commissioner of securities for selling unsuitable products to elderly people.[5][6][7] Other cases of private arbitration "where variable annuities were allegedly sold to people too old to realize any benefit before they died" were also reported. Utah’s Division of Securities has cited at least four World Group Securities brokers since 2006.[8][9]

In April 2007, World Group Securities was fined $50,000 for failing to supervise its representatives in the State of Utah, who were misrepresenting their credentials and services rendered during free lunch seminars targeting seniors.[5][10][11][12]

In June 2007, a couple filed an NASD arbitration claim against World Group Securities, alleging misrepresentation that caused them to lose over $500,000 on investment products that were unsuitable for their risk tolerance. A judge sided with the couple and forced the company into arbitration over the proceedings, and a settlement was reached.[13][14]

In April 2010, World Group Securities was fined in excess of $850,000 as the result of the unauthorized sale of private securities by some of its agents in the State of Arizona.[15][16]

In May 2010, the U.S. Securities and Exchange Commission (SEC) filed a federal case against two former brokers of World Group Securities, accusing them of having raised approximately $14,800,000 through the offer and sale of promissory notes as part of an illegal Ponzi scheme in the States of Ohio and Florida.[17][18][19][20]

In November 2010, the U.S. Securities and Exchange Commission (SEC) ordered World Group Securities to pay, among other things, a civil monetary penalty in the amount of $200,000 for the fraudulent selling of unsuitable securities in the State of California, which were funded using home equity, derived from the refinance of the customers' homes into subprime mortgages.[21][22][23][24] This case has drawn national attention and opened the door for class action lawsuits. Eccleston Law announced publicly on November 29, 2010, that it has expanded the investigation to include all branch offices nationwide.[19][25][26]

References

  1. ^ a b http://brokercheck.finra.org/Firm/FirmSummary.aspx?SearchGroup=Firm&FirmKey=114473&BrokerKey=-1&IndvlBCCtgry=-1&IndvlIACtgry=-1
  2. ^ http://www.npros.com/dir/worldmarketingalliance/
  3. ^ http://www.stockbrokerfraudblog.com/2008/06/state_regulators_investigate_w.html
  4. ^ http://www.finra.org/web/groups/industry/@ip/@enf/@da/documents/disciplinaryactions/p012791.pdf
  5. ^ a b http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8N_74GdteOg
  6. ^ http://www.iht.com/articles/2008/05/28/business/regs.php
  7. ^ http://www.sos.mo.gov/securities/orders/AP-06-48.asp
  8. ^ http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8N_74GdteOg
  9. ^ http://www.stockbrokerfraudblog.com/2008/06/state_regulators_investigate_w.html
  10. ^ http://www.securities.state.ut.us/press/worldgroup.pdf
  11. ^ http://google.com/custom?q=cache:vj66tFxgiAcJ:www.securities.utah.gov/dockets/06008002.pdf+world+financial+group&cd=4&hl=en&ct=clnk&client=google-coop-np
  12. ^ http://www.securities.utah.gov/dockets/06007802.pdf
  13. ^ http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a8N_74GdteOg
  14. ^ http://www.stockbrokerfraudblog.com/2008/06/state_regulators_investigate_w.html
  15. ^ http://images.edocket.azcc.gov/docketpdf/0000110449.pdf
  16. ^ http://www.sec.gov/litigation/admin/2009/33-9035.pdf
  17. ^ http://investorswatchdog.com/blog/investorswatchblog/?p=1365
  18. ^ http://www.sec.gov/litigation/litreleases/2010/lr21529.htm
  19. ^ a b http://www.securities-lawyers.net/blog/index.php/C65/
  20. ^ http://www.dmlaws.com/StockbrokerMisconduct/World_Group_Investigation.aspx
  21. ^ http://www.sec.gov/litigation/litreleases/2008/lr20768.htm
  22. ^ http://www.sec.gov/litigation/complaints/2008/comp20768.pdf
  23. ^ http://www.sec.gov/news/digest/2010/dig112210.htm
  24. ^ http://www.sec.gov/litigation/admin/2010/34-63354.pdf
  25. ^ http://financialcounsel.typepad.com/financialcounsel/2010/11/eccleston-law-launches-investigation-of-world-group-securities-.html
  26. ^ http://rightsforinvestors.com/blog/investments/world-group-securities/
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