Western International Securities, et al.,

U.S. SECURITIES AND EXCHANGE COMMISSION

Lit. Release No. 26065 / July 31, 2024

Securities and Exchange Commission v. Western International Securities, et al., 22-cv-04119 (C.D. Cal., Complaint filed June 15, 2022)

SEC Announces Settlement of Regulation Best Interest Matter with Western International Securities, Inc. and Five Individual Brokers

The SEC announced today that it had filed a Motion by consent to settle the ongoing litigation in SEC v. Western International Securities, Inc. et al., alleging violations of Rule 15l-1(a)(1) of the Securities Exchange Act of 1934 (“Reg BI”) based on the sale of high-risk debt securities known as L Bonds, which were issued by GWG Holdings, Inc.  The SEC filed its complaint in June 2022 against Western International Securities, Inc. (“Western”) and five of its registered representatives.

Without admitting or denying the allegations of the SEC’s complaint, Western has consented to the entry of a final judgment that would permanently enjoin it from violating Reg BI and orders Western to pay disgorgement of the commissions and fees Western retained from all post-Reg BI sales of L Bonds by the five individual defendants totaling $34,468, plus prejudgment interest, as well as a civil penalty of $160,000.

The five individual defendants have also consented, without admitting or denying the allegations of the SEC’s complaint, to the entry of final judgments that would permanently enjoin them from violating Reg BI and orders them to pay disgorgement of all the commissions they received for their post-Reg BI recommendations of L Bonds, prejudgment interest, as well as individual civil penalties of $12,500.

The proposed settlements are subject to approval by the Court.

The SEC’s litigation in Securities and Exchange Commission v. Western International Securities, et al., Civil Action No. 22-cv-04119 (C.D. Cal.) has been led by Ariella Guardi and Timothy Leiman with assistance from Jonathan Epstein and Matthew Connelly, all of the Chicago Regional Office.