Independence Capital Sanctioned over GWG L Bond Sales

A recent disciplinary action against Parma, Ohio financial advisor Independence Capital (CRD# 24723) alleges that the firm violated industry rules in connection with the recommendations of GWG L Bonds. Financial Industry Regulatory Authority records show that the firm has been censured and ordered to pay more than $100,000 in restitution.

A Letter of Acceptance, Waiver, and Consent (No. 2022074289902) describes FINRA’s disciplinary action against Independence Capital. Filed in January 2026, it alleges that the firm failed to reasonably supervise five representatives’ recommendations of GWG L Bonds between 2020 and 2021. It also alleges that the firm failed to create and maintain written supervisory protocols reasonably designed to achieve compliance with Regulation Best Interest. As it explains, Regulation Best Interest requires broker-dealer firms and their representatives to exercise reasonable diligence to form a reasonable basis to believe that their investment recommendations are in the best interest of a retail customer, based on the customer’s investment profile. At the same time, FINRA Rule 3110 requires firms to “establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations, and applicable FINRA rules,” including Regulation Best Interest.

During the period in question, according to the AWC Letter, Independence Capital failed to reasonably supervise the recommendations of five representatives who recommended their customers purchase GWG L Bonds. The Letter notes that GWG L Bonds were risky, speculative, illiquid products that were “only suitable for persons with substantial financial resources and with no need for liquidity,”  issued by GWG Holdings, which filed for bankruptcy in April 2022. The firm’s representatives allegedly recommended that nine retail customers invest $443,000 in L Bond investments, despite these customers having “low, moderate, or medium” risk tolerances. Four of the investors were seniors, according to the Letter, and none had speculative investment objectives. “In approving each of the sales to the nine customers, Independence Capital and [one of its supervisors] failed to perform a reasonable assessment of whether the recommendations were consistent with the customers’ investment profiles,” FINRA found, “particularly in light of the concentration levels.”

As a result of these findings, FINRA censured Independence Capital and ordered it to pay partial restitution of $168,680. More information about the sanction is available in the AWC Letter.

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