World Group Securities (WGS) is an American

broker-dealer In financial services, a broker-dealer is a natural person, company or other organization that engages in the business of trading securities for its own account or on behalf of its customers. Broker-dealers are at the heart of the securities and ...

that provides exclusive services to

World Financial Group World Financial Group (WFG) is a multi-level marketing financial and insurance services company based in Johns Creek, Georgia, a suburb of Atlanta, which sells investment, insurance, and various other financial products through a network of ...

multi-level marketing Multi-level marketing (MLM), also called network marketing or pyramid selling, is a controversial and sometimes illegal marketing strategy for the sale of products or services in which the revenue of the MLM company is derived from a non-salarie ...

financial and insurance services company. WGS is a subsidiary of the Dutch-owned

AEGON Aegon Ltd. (stylized as AEGON) is a Dutch public company for life insurance, pensions and asset management. It is headquartered in The Hague, Netherlands and has 26,000 employees as of July 21, 2020. Aegon is listed on the Euronext Amsterdam a ...

insurance Group. WGS has been involved in a number of lawsuits with state regulators alleging the selling of unsuitable products to elderly people.

History

World Group Securities was incorporated in

Delaware Delaware ( ) is a U.S. state, state in the Mid-Atlantic (United States), Mid-Atlantic and South Atlantic states, South Atlantic regions of the United States. It borders Maryland to its south and west, Pennsylvania to its north, New Jersey ...

, USA on February 6, 2001, in order to replace World Marketing Alliance Securities (WMAS) as servicing broker-dealer when AEGON bought out the book of business generated by World Marketing Alliance (WMA) and reassigned it to the newly created World Financial Group.

Business and operations

WGS is registered with the

Financial Industry Regulatory Authority The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization (SRO) that regulates member brokerage firms and exchange markets. FINRA is the successor to the National Associati ...

(FINRA) to sell securities through World Financial Group (WFG) associates in all 50 states plus

Washington, D.C. Washington, D.C., formally the District of Columbia and commonly known as Washington or D.C., is the capital city and federal district of the United States. The city is on the Potomac River, across from Virginia, and shares land borders with ...

and

Puerto Rico ; abbreviated PR), officially the Commonwealth of Puerto Rico, is a Government of Puerto Rico, self-governing Caribbean Geography of Puerto Rico, archipelago and island organized as an Territories of the United States, unincorporated territo ...

under the Central Registration Depository (CRD) number 114473. Its

U.S. Securities and Exchange Commission The United States Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street crash of 1929. Its primary purpose is to enforce laws against market m ...

(SEC) number is 8-53428. WGS allows only properly licensed and registered WFG representatives to represent it. Its registered types of business include: # Broker or dealer selling corporate

debt securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

(for example, bonds) # Broker or dealer retailing corporate

stock Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the Share (finance), shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporatio ...

over-the-counter Over-the-counter (OTC) drugs are medicines sold directly to a consumer without a requirement for a prescription from a healthcare professional, as opposed to prescription drugs, which may be supplied only to consumers possessing a valid pres ...

Government securities A country's gross government debt (also called public debt or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit occ ...

broker #

Mutual fund A mutual fund is an investment fund that pools money from many investors to purchase Security (finance), securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV in ...

retailer, some of which are affiliated with WGS #

Municipal bonds A municipal bond, commonly known as a muni, is a Bond (finance), bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal ...

broker # Non-exchange member arranging for transactions in listed securities by

exchange Exchange or exchanged may refer to: Arts, entertainment and media Film and television * Exchange (film), or ''Deep Trap'', 2015 South Korean psychological thriller * Exchanged (film), 2019 Peruvian fantasy comedy * Exchange (TV program), 2021 Sou ...

member # Broker or dealer selling variable life insurance contracts or

annuities In investment, an annuity is a series of payments made at equal intervals based on a contract with a lump sum of money. Insurance companies are common annuity providers and are used by clients for things like retirement or death benefits. Examples ...

, some of which are affiliated with WGS

Lawsuits

Some state securities officials, including those in Iowa, Alabama, Missouri, Utah, 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 Arbitration is a formal method of dispute resolution involving a third party neutral who makes a binding decision. The third party neutral (the 'arbitrator', 'arbiter' or 'arbitral tribunal') renders the decision in the form of an 'arbitrati ...

claims.State Regulators Investigate World Financial for Deceptive Sales Practices :: Stock Broker Fraud Blog
/ref> * A 2004

National Association of Securities Dealers The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization (SRO) that regulates member brokerage firms and exchange markets. FINRA is the successor to the National Associati ...

(NASD) disciplinary action report summarized disciplinary actions against WGS. 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." * In December 2006, WGS and one of its brokers were fined $150,000 by Missouri's commissioner of securities for selling unsuitable products to elderly people. 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 WGS brokers since 2006. * In April 2007, WGS was fined $50,000 for failing to supervise representatives in Utah who were misrepresenting their credentials and services rendered during free lunch seminars targeting seniors. * In June 2007, a couple filed an NASD arbitration claim against WGS, 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. * In April 2010, WGS 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. * In May 2010, the

(SEC) filed a federal case against two former brokers of WGS, accusing them of having raised approximately $14,800,000 through the offer and sale of

promissory notes A promissory note, sometimes referred to as a note payable, is a legal instrument (more particularly, a financing instrument and a debt instrument), in which one party (the ''maker'' or ''issuer'') promises in writing to pay a determinate sum of ...

as part of an illegal

Ponzi scheme A Ponzi scheme (, ) is a form of fraud that lures investors and pays Profit (accounting), profits to earlier investors with Funding, funds from more recent investors. Named after Italians, Italian confidence artist Charles Ponzi, this type of s ...

in Ohio and Florida between September 2005 and December 2008. * In November 2010, the

(SEC) ordered WGS 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 refinancing the customers' homes into

subprime mortgages In finance, subprime lending (also referred to as near-prime, subpar, non-prime, and second-chance lending) is the provision of loans to people in the United States who may have difficulty maintaining the repayment schedule. Historically, subpr ...

References

{{reflist Brokerage firms