Securities Exchange Act of 1934
Release No. 47963 / June 2, 2003

Investment Advisers Act of 1940
Release No. 2134 / June 2, 2003

Administrative Proceeding
File No. 3-11088


In the Matter of

GREGORY L. FEARS

Respondent.


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ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS

I.

The Securities and Exchange Commission ("Commission") deems it appropriate to enter an order in this previously instituted public administrative proceeding, making findings and imposing remedial sanctions against Gregory L. Fears ("Respondent" or "Fears") pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act").

II.

Fears has submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over Respondent, the subject matter of these proceedings and the findings contained in paragraphs III.C. and III.D. below, which are admitted, Respondent consents to the issuance of this Order Making Findings and Imposing Remedial Sanctions ("Order") as set forth below.

III.

On the basis of the Order Instituting Proceedings and the Offer submitted by Fears, the Commission makes the following findings:

A. World Securities, Inc. ("World Securities") was a broker-dealer registered with the Commission from February 1996 to April 2003, with its principal place of business located in Joplin, Missouri.

B. Investors Financial, Inc. ("Investors Financial") was an investment adviser registered with the Commission from July 5, 1996 to May 1, 1998, and from October 31, 1998 to June 29, 2001. During this time, Investors Financial's principal place of business was in Joplin, Missouri.

C. Fears, age 39, was a resident of Fayetteville, Arkansas at the time of his incarceration and previously lived in Joplin, Missouri. Fears has a high school education and, prior to the events at issue here, no experience in being a trustee or financial adviser. From 1992 to 2001, Fears acted as an investment adviser, in that, among other things, he held himself out as an investment adviser and, together with his partner, Martin W. Smith ("Smith"), was paid to manage his clients' assets and provided his clients with account statements that purported to advise them as to the value of their investments. In addition, Fears was a control person, a 50% shareholder and, at various times, an officer and director of World Securities and Investors Financial.

D. On March 21, 2002, a final judgment was entered against Fears in the criminal case of United States of America v. Gregory L. Fears, Case Number 2:01CR20033 in the United States District Court for the Western District of Arkansas. This judgment was entered pursuant to Fears' guilty plea to a twenty-two count criminal information that charged Fears with three counts of violating 15 U.S.C. §§ 80b-6 and 80b-17 (investment advisory fraud), one count of violating 18 U.S.C. § 1343 (wire fraud), five counts of violating 18 U.S.C. § 1957 (money laundering), six counts of violating 18 U.S.C. § 1014 (loan fraud) and seven counts of violating 18 U.S.C. § 982(b)(1) (criminal forfeiture). The judgment sentenced Fears to 144 months of imprisonment and, among other things, ordered him to pay restitution of $64,045,771.77.

E. The information against Fears alleged, among other things, that beginning in 1992, Fears and Smith formed a partnership in which Fears promoted himself to potential clients as a financial trustee available to handle all investment decisions for the clients, with Smith providing investment advice to Fears as the clients' trustee, as well as directly to the clients. Fears and Smith formed World Securities and Investors Financial for the purpose of managing their clients' assets and to allow Fears and Smith to profit from buying and selling securities for their clients. Fears recommended that a number of their unsophisticated and generally elderly advisory clients invest in World Capital Management, L.P. ("World Capital"), an unregistered hedge fund created by Fears and Smith and managed by Smith, who conducted high-risk securities trading in its account through World Securities. In order to induce their clients to invest in World Capital, Fears made misrepresentations and omissions of material facts to clients regarding the nature of World Capital and the risks of investing in it. As a result of Fears and Smith's fraudulent scheme, their advisory clients lost essentially all of their investments.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Respondent's Offer.

ACCORDINGLY, IT IS HEREBY ORDERED:

Pursuant to Section 15(b)(6) of the Exchange Act and Section 203(f) of the Advisers Act, that Respondent Fears be, and hereby is, barred from association with any broker, dealer, or investment adviser.

By the Commission.

Jonathan G. Katz
Secretary