Independent Financial Group LLC Customer Complaints & Regulatory Actions Updated April 9, 2021
The White Law Group is investigating potential securities claims involving Independent Financial Group LLC (CRD#: 7717, San Diego, CA)
Independent Financial Group, LLC, headquartered in San Diego, California, is dually registered as an investment adviser and broker-dealer. As of September 5, 2018, the firm reported regulatory assets under management of approximately $2.7 billion.
FINRA Censures and Fines Independent Financial Group for Failure to Supervise
According to a Letter of Acceptance Waiver and Consent on April 8, 2021, FINRA censured and fined Independent Financial Group $200,000 for supervisory issues.
From January 2008 through March 2016, the firm reportedly failed to reasonably supervise one of it’s former registered representatives who made unsuitable recommendations to customers. The representative reportedly recommended that his customers concentrate their retirement assets and liquid net worth in speculative and illiquid securities. Apparently the firm became aware of red flags indicating that the representative was making unsuitable recommendations to his customers yet the firm failed to take reasonable actions to investigate and stop the misconduct.
Broker Misconduct and Customer Complaints
All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.
There have been several cases of registered representatives employed by Independent Financial Group who were allegedly involved in broker misconduct and fraudulent activities.
On March 13, 2020, FINRA reportedly revoked the registration of former Independent Financial Group advisor James M. Lamont after he allegedly failed to failed to pay fines and/or costs of $99,437.64 in FINRA Case #2017052705801. FINRA reportedly suspended Lamont from working in the securities industry for 18 months and fined him $10,000.
FINRA alleges that between September 2015 and November 2017, Lamont purportedly engaged in unapproved private securities transactions involving the sale of promissory notes relating to Woodbridge Group of Companies, a purported real estate investment fund.
He reportedly has 27 disclosure events on his broker check record, including 3 regulatory events, 10 judgement/liens, 1 employment separation and 13 customer complaints.
Allegations include misrepresentation and unsuitable investments, among others.
March 2019 – A civil lawsuit was filed involving Independent Financial Group and its registered representative, Shawn Davis (CRD#: 2911230) in the Superior Court of the State of California requesting unspecified damages founded on allegations that false or misleading statements had been made concerning a business development company, real estate security, equipment leasing products and direct investments. The claims further alleges that alternative investment transactions recommended by Shawn Davis were inappropriate and that Independent Financial Group and Davis’ former securities broker dealer employers Berthel Fisher and WFG Investments failed to supervise the transactions effected in the customer’s account. The case is Civil Case No. S-CV-0042532.
David was registered with Independent Financial Group in Auburn, CA from 2014 until 2017. He reportedly had 12 customer complaints filed against him for allegations of unsuitable investments and misrepresentation, among others.
According to his FINRA BrokerCheck report, Davis was reportedly affiliated with Independent Financial Group in Auburn, CA from August 2012 until May 2017.
October 2018 – Former Independent Financial Group advisor Jon Pariser was barred after failing to provide FINRA with requested documents and information related to allegations that he referred some of his customers to an individual who was not registered and who may have recommended or sold potentially unsuitable securities to them.
Pariser was reportedly registered with Independent Financial Group in Pacific Grove, CA from 2014 until 2018. He reportedly has ten customer complaints filed against him since 2006, four of which are still pending, according to his broker profile. Allegations include fraudulent, unregistered securities recommendations among others.
July 2018 – The Financial Industry Regulatory Authority (FINRA) reportedly barred former Independent Financial Group advisor Kyusun “Kenny” Kim from working in the securities industry after he allegedly made unsuitable recommendations to numerous senior customers that they concentrate their retirement assets and liquid net worth in speculative and illiquid securities.
Kim purportedly falsely inflated the net worth figures of several customers on their new account forms and other documents so that they appeared eligible to purchase certain speculative investments, in violation of FINRA Rules.
According to his FINRA BrokerCheck report, Kim has 23 customer complaints on his record. Allegations include wrongful conduct, breach of fiduciary duty, unsuitable investments, breach of contract and financial abuse, among others.
He was registered with Independent Financial Group in San Diego, CA from 2006 until March 2016.
SEC Sanctions Independent Financial Group
September 2019 – The SEC charged Independent Financial Group with breaches of fiduciary duty and inadequate disclosures in connection with its mutual fund share class selection practices and the fees it and its associated persons received. Between January 1, 2014 to March 30, 2017 the broker dealer reportedly purchased, recommended, or held for advisory clients mutual fund share classes that charged 12b-1 fees instead of lower-cost share classes of the same funds for which the clients were eligible. The firm and its associates received 12b-1 fees in connection with these investments and reportedly failed to disclose the conflicts of interest related to its receipt of 12b-1 fees, and/or its selection of mutual fund share classes that pay such fees. The firm and its representatives also reportedly received 12b-1 fees for advising clients to invest in or hold such mutual fund share classes.
The firm was censured and agreed to pay disgorgement and prejudgment interest to affected investors, totaling $1,426,150.64.
Free Consultation with a Securities Attorney
The foregoing information, which is all publicly available, is being provided by The White Law Group. The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois.
If you have concerns regarding investments you purchased through Independent Financial Group and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.
For more information on The White Law Group, visit www.whitesecuritieslaw.com.