8-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                Date of Report (Date of earliest event reported):
                                 October 4, 2002

                                 SWS GROUP, INC.
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             (Exact name of Registrant as specified in its charter)


          DELAWARE                   No. 0-19483               No. 75-2040825

(State or other jurisdiction         (Commission                (IRS employer
      of incorporation)              File Number)            Identification No.)
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                           1201 ELM STREET, SUITE 3500
                               DALLAS, TEXAS 75270
          (Address, including zip code, of principal executive office)
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        Registrants' telephone number, including area code: 214-859-1800

                                 Not applicable

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       (Registrant's former name or address, if changed since last report)



Item 5. OTHER EVENTS.

First Savings Bank (FSB), a wholly owned subsidiary of SWS Group, Inc., has
learned that a mortgage banking customer located in New York has been suspended
from transacting business by state authorities. A receiver was appointed to
oversee the mortgage bank on September 27, 2002. FSB had 47 loans in its
portfolio with an aggregate outstanding principal balance of $7.8 million from
this mortgage bank.

It appears that loans purchased by FSB may also have been sold to other
investors. As a result of its investigation of the mortgage bank, the FBI has
advised that it believes as many as 16 loans purchased by FSB for an aggregate
of $3.4 million were involved. However, there can be no assurance that the
remaining 31 loans are valid until a thorough review of the files has been
completed. FSB is also examining public records to ascertain the adequacy of its
collateral, if any, and will make demands, if appropriate, on the mortgage bank,
and/or its employees, customers and its insurance carrier. Details of any
potential assets, collateral or insurance recovery are not known at this time.
Management is unable to determine that a material adverse effect on future
financial condition or results of operations is not reasonably likely to occur.

Item 7. EXHIBITS.

(c) Exhibits. Exhibit 99. SWS Group, Inc. Press Release issued October 4, 2002.

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                 SWS GROUP, INC.
                                 Date: October 4, 2002


                                 By:     /s/ Kenneth R. Hanks
                                     -------------------------------------------
                                     Kenneth R. Hanks
                                     Executive Vice President, Chief Financial
                                        Officer and Treasurer



                                  EXHIBIT INDEX


EXHIBIT NO.           DESCRIPTION OF EXHIBIT

99                    SWS Group, Inc. Press Release issued October 4, 2002.

EX-99

                                                                      EXHIBIT 99

                                                           For Immediate Release

     SWS Group, Inc. Discloses Fraud Perpetrated Against Its Subsidiary Bank

DALLAS, October 4, 2002 -- Officials of SWS Group, Inc. (NYSE: SWS) said today
they have learned that SWS' First Savings Bank subsidiary appears to have been
the victim of fraud in its mortgage purchase operation.

SWS officials said that apparently First Savings Bank purchased loans that also
may have been purchased by other investors from a mortgage bank located in New
York.

The New York mortgage bank has been suspended from transacting business by New
York State authorities. A receiver was appointed to oversee the mortgage bank on
Sept. 27. First Savings Bank currently has 47 loans in its portfolio purchased
from the mortgage bank with an aggregate outstanding principal balance of $7.8
million. First Savings Bank believes some of these loans were sold twice. The
FBI has advised that it believes as many as 16 loans purchased by First Savings
Bank for an aggregate of $3.4 million are involved.

SWS Group Chief Executive Officer Donald W. Hultgren said, "We have been very
happy with First Savings Bank and its performance since SWS acquired the bank in
the spring of 2000," adding that the bank and its subsidiaries have contributed
approximately $29 million to SWS' net income over the past three fiscal years.

"Obviously, we are not happy about being the victim of fraud," Hultgren
continued. "We are taking every precaution to keep this from happening in the
future. Efforts are underway to explore all possibilities to recover any loss
that may have been sustained."

SWS officials said there can be no assurance that the remaining 31 loans
purchased from the mortgage bank are valid until a thorough review of the files
has been completed. First Savings Bank is also examining public records to
ascertain the adequacy of its collateral, if any, and will make demands, if
appropriate, on the mortgage bank, and/or its employees, customers and insurance
carrier. Details of any potential collateral or insurance recovery are not known
at this time. Management is unable to determine the impact these events may have
on the bank or the company.

SWS Group, Inc. is a Dallas-based holding company that offers a broad range of
investment and financial services through its subsidiaries. The company's common
stock is listed and traded on the New York Stock Exchange under the symbol SWS.
Subsidiaries of the company include SWS Securities, Inc., Mydiscountbroker.com,
First Savings Bank and its online division MyBankUSA.com, SWS Financial
Services, Inc. and SWS Capital Corporation.

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CONTACT: Jim Bowman, Vice President - Corporate Communications, (214) 859-9335
jbowman@swst.com
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