Articles Tagged with World Group Securities

shutterstock_61142644The Financial Industry Regulatory Authority (FINRA) brought and enforcement action against broker Tracy Wengert (Wengert) (FINRA No. 2015044289201) resulting in a bar from the securities industry alleging that Wengert failed to provide FINRA staff with information and documents requested. The failure to provide those documents and information to FINRA resulted in an automatic bar from the industry. FINRA’s document requests related to the regulators investigation into claims in February 2015, FINRA enforcement began investigating allegations of misconduct by Wengert in that he opened brokerage accounts outside of the Transamerica Financial Advisors, Inc. (Transamerica) on behalf of customers and placed unsuitable trades in these accounts.

FINRA’s investigation appears to stem from Wengert’s termination from Transamerica in January 2015. At that time Transamerica filed a Form U5 termination notice with FINRA stating in part that the firm discharged Wengert under circumstances where there was allegations that Wengert was alleged to have managed a client account on a discretionary basis without approval or oversight through the firm.

Wengert entered the securities industry in 1999. From April 2002 until January 2012, Wengert was associated with World Group Securities, Inc. Thereafter, from January 2012 until February 2015, Wengert was associated as a registered representative with Transamerica.

shutterstock_152237534The Financial Industry Regulatory Authority (FINRA) brought a complaint against broker Toni Chen (Chen) concerning allegations that during the course of FINRA’s investigation into whether Chen was involved in a pyramid scheme that may also constitute “selling away” activities. Chen failed to respond to FINRA’s requests.

On October 18, 2013, the Securities and Exchange Commission (SEC) filed a Form U6 with FINRA regarding Chen’s activities disclosing the United States District Court for the Eastern District of New York had granted the SEC’s request for a temporary restraining order for an asset freeze and other emergency relief against Chen and other defendants. The SEC restraining order is in connection with an ongoing worldwide investment pyramid scheme targeting members of the Asian-American Community. Thereafter, FINRA commenced its own investigation into whether Chen while registered with a FINRA firm or had engaged in any violations of the securities laws.   Until April 2012, Chen was registered with World Group Securities, Inc. Thereafter, and until August 2012, Chen was associated with Transamerica Financial Advisors, Inc. (Transamerica).

FINRA alleged that it made numerous requests seeking information and testimony from Chen. In spite of FINRA’s numerous requests, Chen failed to provide testimony and certain information requested by staff. Due to Chen’s failure to provide documents, FINRA brought the instant complaint.

Maurice Joseph Chelliah (Chelliah) was recently barred from the financial industry by The Financial Industry Regulatory Authority (FINRA) over allegations that Chelliah converted $90,000 from two World Group Securities, Inc. (WGS) clients and made unsuitable recommendations to five WGS customers.  FINRA alleged that Chelliah recommended that these customers refinance their primary residences and use the proceeds to purchase securities and insurance policies that they did not need and that were beyond the customers’ ability to afford.  FINRA found that as a result of Chelliah’s recommendations some of the customers lost their securities, their life insurance policies, and their residences when they were unable to keep their mortgages current.

FINRA alleged that Chelliah violated NASD Rule 2110 and FINRA Rule 2010 by converting customer funds.  These rules provide that a member, “in the conduct of his business, shall observe high standards of commercial honor and just and equitable principles of trade.”  FINRA found that two of Chelliah’s customers were 80 and 75 years-old respectively and were unsophisticated investors.  Chelliah recommended that the customers liquidate their mutual fund shares.  Following the liquidation, $90,000 in proceeds was transferred to Chelliah’s three outside businesses.  The customers had provided these funds to Chelliah in order for him to pay monthly bills and expenses on their behalf but instead Chelliah used these funds for his own personal benefit.

FINRA also alleged that Chelliah made unsuitable transactions in at least five customer accounts. NASD Rule 2310 provides that “in recommending to a customer the purchase, sale or exchange of any security, a member shall have reasonable grounds for believing that the recommendation is suitable for such customer upon the basis of the facts, if any, disclosed by such customer as to his other security holdings and as to his financial situation and needs…”

Gevorg Daldumyan was recently barred from the financial industry by The Financial Industry Regulatory Authority (FINRA) over allegations that he failed to appear for testimony concerning condominium cooperative investments.

Daldumyan was registered with World Group Securities, Inc. (WGS) from 2002 through January 2012.  Thereafter, Daldumyan was associated with Transamerica Financial Advisors, Inc. (Transamerica) or its predecessor.  On June 19, 2012, Transamerica filed a Form U5 with FINRA stating that Daldumyan had voluntarily resigned on May 21, 2012, during an internal review by the firm arising from “information that the registered representative made investments in a condominium cooperative in Arnienia which appear not to have been disclosed to the firm.” Daldumyan is no longer associated with any FINRA member.

Due to the U5 Form filing, FINRA sent requests to Daldumyan for more information concerning the outside investments.  By letter dated May 20, 2013, FlNRA staff requested that Daldumyan appear for on-the-record testimony.  In response to the letter, Daldumyan stated that he would not appear for testimony at any time.  Consequently, Daldumyan violated FINRA Rule 8210 by refusing to appear and provide testimony and was barred from association with any FINRA member firm.

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