World Group Securities

The Financial Industry Regulatory Authority says that former World Group Securities representative David Olson was named in a customer complaint filed in October 2008. The customer claims Olson persuaded him to buy real estate, which was leased back to the representative. The customer alleges that Olson agreed to pay the customer mortgage payments plus interest.

The customer says Olson defaulted on their deal and stopped making payments. The customer is also accusing the representative of soliciting three promissory notes for purchase and earmarking proceeds to buy other real estate properties.

It is considered improper for a FINRA registered representative to issue promissory notes, borrow money from clients, or engage in undisclosed, outside business.

Shepherd Smith and Edwards is investigating securities fraud claims involving David Olson and business partner Edward Allen, as well as their business entities WFG and A&O Companies. Allen also used to work for World Group Securities.

World Group Securities
World Group Securities brokers have been in the headlines recently following news that the US Securities and Exchange Commission was suing five of them due to allegations that they persuaded investors to use subprime mortgages to refinance their homes. The brokers allegedly were compensated for securities sales and mortgage refinancings.

Related Web Resources:

Shepherd Smith Edwards & Kantas LTD LLP Investigates Claims for Clients of David Olson, Edward Allen and World Group Securities, Inc., Marketwatch.com, December 3, 2008
Securities and Exchange Commission Sues Five World Group Securities Brokers For Persuading Clients to Refinance Homes With Subprime Mortgages, Stokbroker Fraud Blog, October 16, 2008 Continue Reading ›

This month, the US Securities and Exchange Commission filed a civil lawsuit against five World Group Securities brokers for allegedly pushing investors into refinancing their homes with subprime mortgages. The SEC is accusing the mortgage brokers of taking advantage of the clients’ lack of education, modest financial means, and poor fluency in English to fraudulently sell them unsuitable securities-primarily variable universal life policies.

Because most of the investors who were persuaded to purchase the securities lacked the funds or income to do so, the defendants allegedly persuaded them to come up with the money through the refinancing of their fixed-rate mortgages into subprime adjustable-rate negative amortization mortgages. The brokers received compensation from the securities sale and the mortgage refinancings.

The defendants in the case are Guillermo Haro, Jesus Gutierrez Kederio Ainsworth, Angel Romo, and Gabriel Paredes. The Commission says that the brokers violated the antifraud provisions of the securities laws.

The SEC says the men misrepresented the returns the investors would get back from the securities, the nature and liquidity of the variable universal life policies, and the new mortgages’ terms, as well as failed to reveal key facts to the investors. The Commision’s complaint also accuses the brokers of falsifying customer account forms and placing inaccurate securities sales information on order tickets.

The SEC calls the men’s actions and their willingness to allow their clients to risk the potential loss of their homes “egregious” conduct that will not be tolerated. The Commission is seeking disgorgement, injunctions, and financial fines against the defendants.

If you are a victim of investor fraud, it is important that you find out about the legal remedies available to you.

Commission Charges Five Registered Representatives with Fraudulent Sales of Unsuitable Securities Funded Through Subprime Mortgage Refinancings, SEC, October 3, 2008
World Group Securities brokers charged with fraud, Bizjournals.com, October 13, 2008

Related Web Resource:

Subprime Mortgage, Investopedia Continue Reading ›

Articles Posted in World Group Securities

Stockbroker Fraud Law Firm Shepherd Smith Edwards & Kantas LTD LLP Investigate Securities Fraud Claims Involving Former World Group Securities Representatives David Olson and Edward Allen

Securities and Exchange Commission Sues Five World Group Securities Brokers For Persuading Clients to Refinance Homes With Subprime Mortgages