Drugs were routinely used to control behaviour of elderly mentally ill patients rather than treat illness at a unit in Devon, a health watchdog says.
An investigation into the deaths of six patients at the former Harbourne unit in Totnes found poor care did not cause their deaths.
But the Care Quality Commission found a failure of medical and nursing care.
The unit is now closed. County health bosses said significant improvements had been made at other such units.
Concerns about standards of care were first raised in November 2008, when a whistleblower reported poor practice at the Harbourne Unit - a ward for up to 10 people with mental health needs including dementia, operated by the Devon Partnership NHS Trust.
The trust instructed its own medical director to review care on the unit, looking specifically at the care of six people who died between October 2007 and November 2008.
It also found a failure of medical and nursing care, poor record-keeping and lack of care planning. The trust informed the regulator, then the Healthcare Commission, which conducted inspections of the unit in December 2008.
The Care Quality Commission (CQC), which took over from Healthcare Commission in 2009, said the trust could have acted quicker to tackle problems, which included mood-altering drugs being unnecessarily handed out to patients.
The unit was permanently closed in July 2009.
The trust's chief executive, Iain Tulley, said prompt action was taken to address problems with care at the Harbourne Unit when they were identified.
He said: "We readily acknowledge the serious shortcomings in the care that was provided on the Harbourne Unit in 2008.
"We have taken active steps to address these - including appropriate action with the staff concerned - and, more importantly, we have learned important lessons that have enabled us to significantly improve the quality of care we offer to this vulnerable group of people."
The trust has started a £4.6m investment programme to improve and maintain the safety of older people's units.
The CQC is working on a follow-up review to establish if the trust is meeting new standards which came into force this year.