Independent Financial Group, LLC has agreed to refund customers and pay a fine as part of a Consent Order entered into with the Texas Securities Commission.
Independent Financial Group agreed to refund $276,398.42 to customers and pay an administrative fine of $75,000 for failing to have a reasonable supervisory system in place.
According to the Consent Order:
“From February 2016 through April 2017, an investment adviser representative (IAR) formerly affiliated with Respondent (hereinafter, the “Representative”) traded in non-traditional exchanged-traded funds (“non-traditional ETFs”) in certain client accounts. Specifically, the Representative implemented a buy-and-hold strategy called UVXY, a leveraged inverse ETF designed for short-term use and incurred significant losses as a result.
During this time, Respondent failed to have specific training requirement regarding non-traditional ETFs, failed to have a supervisory system in place to monitor and flag for extended holding periods related to leveraged ETFs and failed to prevent the Representative from purchasing more than 2x leveraged ETFs in client accounts when the Representative was no approved to purchased them.”
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