According to FINRA, Independent Financial Group, LLC (CRD #7717), based in San Diego, California, was censured, fined $500,000, and required to certify remediation. All affected customers have already received or are expected to receive full restitution through a separate agreement. The firm consented to these sanctions without admitting or denying the findings. FINRA found that Independent Financial Group failed to establish, maintain, and enforce a supervisory system reasonably designed to supervise excessive trading and assure compliance with Regulation Best Interest (Reg BI). The firm also failed to reasonably supervise a registered representative who excessively traded five customers' accounts, most of whom were elderly. The firm's written supervisory procedures assigned compliance staff to review an Excessive Trading Report, but instead, staff reviewed a different internal excessive trade alert system that had deficiencies the firm was unaware of. The procedures failed to provide guidance on how to conduct reviews, when to take action, or how to use metrics such as cost-to-equity ratios or turnover rates to identify excessive trading. Compliance staff frequently closed alerts without further investigation. A senior supervisor instructed supervisory personnel to assess each alert only as it pertained to the specific trade generating it, rather than looking at patterns of trading across transactions. The firm provided no guidance to supervisors on what factors might suggest excessive trading or what steps to take if identified. The representative's excessive trading caused customers to pay more than $2.2 million in total trading costs and incur approximately $2.2 million in realized losses, inclusive of commissions. FINRA also found that the firm failed to timely and completely respond to requests for documents and information. The firm's initial production omitted Excessive Trading Reports and certain alerts that had disappeared from the system. For investors, particularly elderly individuals, this case underscores the devastating impact excessive trading can have on investment accounts. Churning, or excessive trading, generates commissions for the advisor while eroding the customer's portfolio. Investors should monitor their account statements for frequent trading and high commission costs relative to their portfolio size.