Investors should know that this firm has 13 disclosures on its BrokerCheck record. Clients of Independent Financial Group should review the most recent sanctions and fines on the brokerage firm’s record. The firm has allegedly failed to supervise its brokers, leading to unsuitable recommendations.
Alleged Failure to Report Administrative Actions
On February 24, 2023, the New York State Department of Financial Services alleged that IFG failed to report administrative actions taken by the State of South Dakota Department of Labor and Regulation, Division of Insurance, as well as the Texas State Securities Board, within 30 days.
New York imposed a monetary fine of $1,000.
Non-Traditional ETFs and Alleged Failure to Supervise
On April 1, 2021, the State of Texas alleged that an individual registered with IFG traded in non-traditional ETFs, implementing a buy-and-hold strategy that was unsuitable for these investment products, which are designed for short-term use. The brokerage firm allegedly failed to have a supervisory system in place to stop the representative from purchasing leveraged ETFs that he was not approved to purchase. According to the allegations, the firm has agreed to refund customers $276,398.42, in addition to paying Texas a fine of $75,000.
Review the full Disciplinary Order her: Order No. IC21-CAF-01
Alleged Failure to Supervise and Outside Business Activity
According to regulatory action filed by South Dakota on July 22, 2020, IFG failed to properly review and/or evaluate the outside business activity filed by one of its registered agents. This request involved the sale of promissory notes. As part of the terms of the sanction, IFG agreed to pay $18,750 in restitution to investors.
Non-Traded REITs and Structured Products
FINRA and IFG entered into an Acceptance, Waiver, and Consent agreement on April 8, 2021, alleging that IFG had failed to supervise its representative. The representative allegedly sold non-traded REITs and structured products – both risky investments. He allegedly sold these by recommending senior investors liquidate their 401(K)s and pension plans. The supervisor allegedly failed to reasonably investigate red flags. The representative allegedly recommended these investments to investors with little to no investment experience. Supervisors had allegedly raised concerns about investments being incorrectly marked as “unsolicited.” Unsolicited investments are not reviewed for suitability and are therefore subject to less scrutiny.
As part of the terms of the AWC, the broker consented to a fine of $200,000.
