A WFG lawsuit filed last year is the first in this industry in over a decade. In 2007, the Securities Commission started investigating the firm’s practices. As a result, the firm’s practice of opening leveraged accounts without proper supervision and explanation of risks was deemed illegal. The firm also failed to properly supervise salespeople. It also had inadequate “Know Your Client” forms that failed to accurately represent an investor’s knowledge, income, risk tolerance, and investment objectives.
In July 2018, the Financial Industry Regulatory Authority (Finra) fined the company $700,000 for violating securities laws by forcing its agents to sell leveraged products.
As a result of these practices, twelve WFG agents lost their licenses. The suit alleges that the firm’s salespeople had fabricated documents to manipulate customers and mislead them. While it may seem logical, this type of practice violates securities laws and consumer protection laws.
The company’s sales practices have been criticized in various ways. While some of their agents may be reasonably sophisticated advisers, the need to feed a recruiting machine can bring out the worst in people. In the World Financial Group case, seven brokers sold $1.4 million worth of fraudulent notes, scamming U.S. investors of their retirement savings. While WFG claims it did not know the salespeople selling fake notes, the FDIC claims that the firm owed its clients millions of dollars in a lawsuit.
The company’s sales practices are often criticized as a result of the fine.
Some WFG salespeople were disciplined by the Mutual Fund Dealers Association of Canada for knowingly selling leveraged products to their clients. This was an ongoing practice that WFG continues to operate in. In addition to finra’s $700,000 fine, World Financial Group was forced to reimburse $12 million in lost profits. The company’s sales practices also led to the loss of 12 licensed life insurance agents.
WFG has also been criticized for a fraudulent sales scheme involving a single million-dollar portfolio. The company has subsequently settled the case. WFG is still liable for millions of dollars in losses to its clients. It is unclear how many people are left with a lawsuit from the World Financial Group. But it is an unfortunate case that is worth examining. If WFG is at fault, it must be stopped immediately.
The firm was fined $700,000 by the Canadian Financial Services Authority (MFDA) for failing to report fraud.
In addition to the WFG lawsuit, several other life insurance salespeople were also disciplined by the MFDA. This is a troubling sign. While the company is likely to pay a large portion of the fine, WFG has not been able to repay its clients. Its former employees should be prosecuted for deceitful and unlawful practices.
The company’s marketing strategies target the middle-market consumer and emphasize indexed universal life and term life products. While this strategy works for many consumers, it is not effective for many others. A WFG lawsuit will only harm the interests of consumers who are unable to afford these products. So, the next time you see WFG’s ads, beware of scams! They are likely to target middle-class consumers.
The World Financial Group has been suing its employees for deceptive practices that include misleading sales tactics.
While the company is not illegal, its business practices are illegal. A WFG lawsuit against the company has been filed in a US District Court in New York. The fine for this violation has already reached $700,000, and four of the company’s former salespeople have lost their licenses. A WFG lawsuit against a life insurance agency could be the result of a fraudulent sales practice.
WFG’s marketing strategy targets the middle-market consumer. Its advertising practices promote IULs over other products and emphasize the importance of indexed universal life policies. WFG’s marketing strategies have sparked a massive class-action suit against the firm in the United States and Canada. This lawsuit is part of the ongoing legal battle between the company and its customers. Its actions have caused thousands of consumers to suffer, but WFG has been able to settle the cases of a few of them.