UPDATE 4/11/2020: According to FINRA’s February 2020 Disciplinary Actions: “Cambridge Investment Research, Inc. (CRD #39543, Fairfield, Iowa) December 31, 2019 – An AWC was issued in which the firm was censured and fined $150,000. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to reasonably supervise short-term trading of UITs and mutual fund Class A shares. The findings stated that the firm relied on an automated trade surveillance system as part of its system for identifying potentially unsuitable short-term trading or switch transactions in long-term products. The system generated alerts that required principal review of certain potential mutual fund and UIT switch transactions. However, the firm failed to provide sufficient guidance for principals to follow when an alert was generated. As a result, the firm’s principals were inconsistent in following up on the alerts, such as by contacting customers to inquire about the reasons for the transactions to ensure that the customers understood the consequences of such transactions. The lack of sufficient guidance to firm principals allowed at least one of its representatives to engage in unsuitable short-term trading in mutual fund Class A shares. Moreover, the firm’s system was unreasonable because it configured the alert only to identify switch transactions and did not have any other electronic system to monitor for other potentially unsuitable short-term trading in mutual fund Class A shares and UITs that did not qualify as a switch transaction. In addition, the firm’s quarterly pattern report had many of the same limitations as the alert because it was configured only to identify potentially unsuitable switch transactions, so by extension, it identified only patterns of potentially unsuitable switch transactions. Furthermore, the firm required its Office of Supervisory Jurisdiction supervisors to ensure that customers signed letters to acknowledge switch transactions that triggered the alert. However, the firm did not reasonably enforce its WSPs and these letters were not always sent to customers after their transactions triggered the alert. During branch inspections the firm failed to identify that, in some cases, supervisors failed to obtain signed switch letters from customers. The findings also stated that the firm monitored commissions through an alert in its automated trade surveillance system. However, this system was not reasonably designed to achieve compliance with FINRA’s rules prohibiting the charging of excessive commissions because supervisors did not review transactions that triggered that alert unless the trade generated other alerts in addition to the alert for excess commissions. It was not until later that the firm adjusted its excess commission alert so that a supervisor reviewed each trade flagged for potential excess commission charges. As a result of this delay, firm representatives executed transactions that resulted in $17,124 in excess commissions on trades entered by firm representatives, and a single trade in which the commission amount of $25,000 was entered in error. FINRA identified these excess commissions and thereafter the firm reimbursed its customers for those charges. The findings also included that the firm failed to identify and apply available breakpoint discounts for eligible customers. The firm’s electronic trade surveillance system had an alert designed to identify potential mutual fund transactions where customers did not receive the benefit of available breakpoints. However, the firm could not demonstrate that its principals consistently reviewed transactions that triggered this alert unless that transaction generated other alerts that collectively met the minimum threshold required for supervisory review. At FINRA’s request, the firm reviewed all transactions that triggered its electronic surveillance alert for potential failures to provide available breakpoint discounts. Of the alerts not reviewed by a supervisor, the firm identified multiple transactions that resulted in customer overcharges of $27,849. The firm reimbursed customers for commission overcharges. (FINRA Case #2017052543601)”
Galvin Legal, PLLC is launching an investigation on behalf of investors who may have suffered losses investing with Cambridge Investment Research. If you suffered losses investing with Cambridge Investment Research, then Galvin Legal, PLLC may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim.
Cambridge Investment Research (CRD# 39543) (SEC# 8-48740)
As of April 4, 2020, Cambridge Investment Research’s FINRA BrokerCheck Report contains the following:
8 Regulatory Event Disclosures
4 Arbitration Disclosures
Main Office Location
1776 PLEASANT PLAIN RD.
FAIRFIELD, IA 52556-8757
UNITED STATES
Mailing Address
1776 PLEASANT PLAIN RD.
FAIRFIELD, IA 52556-8757
UNITED STATES
Business Telephone Number
641-472-5100
Direct Owners and Executive Officers
CAMBRIDGE INVESTMENT GROUP, INC., SHAREHOLDER/HOLDING COMPANY
BAXLEY, JOHN DOUGLAS (CRD#:3214809), FIRST VICE PRESIDENT, FIDUCIARY SERVICES
BELL, COLLEEN MCGUIRE (CRD#:5077188), EXECUTIVE VICE PRESIDENT, FIDUCIARY SERVICES/OPERATIONS, CHIEF FIDUCIARY SERVICES OFFICER/DIRECTOR
BOYLES, RICHARD CHARLES (CRD#:2210763), EXECUTIVE VP, FINANCE AND HR/CHIEF FINANCIAL OFFICER/FINOP/PRINCIPAL OPERATIONS OFFICER/TREASURER/DIRECTOR
GRAHAM, NELSON MURPHY II (CRD#:6848993), SENIOR VICE PRESIDENT TECHNOLOGY/CHIEF TECHNOLOGY OFFICER
MILLER, SETH AARON (CRD#:5495508), EXECUTIVE VICE PRESIDENT RISK MANAGEMENT/GENERAL COUNSEL/CHIEF RISK OFFICER/DIRECTOR
SCHWARTZ, ERIC (CRD#:1203799), EXECUTIVE CHAIRMAN OF THE BOARD OF DIRECTORS
SELBERG, KYLE RUSSELL (CRD#:1037140), EXECUTIVE VICE PRESIDENT/CHIEF BUSINESS DEVELOPMENT OFFICER/DIRECTOR
SHAFER, ANDREA LYNN (CRD#:5448499), CHIEF COMPLIANCE OFFICER/FVP, LEGAL
STONE, CARLA JEAN (CRD#:3193985), FIRST VICE PRESIDENT, FINANCE/CHIEF ACCOUNTING OFFICER
VIVACQUA, JEFFREY FRANCIS (CRD#:2608892), EXECUTIVE VICE PRESIDENT/CHIEF MARKETING OFFICER/DIRECTOR
WEBBER, AMY LYNN (CRD#:1812670), PRESIDENT/CHIEF EXECUTIVE OFFICER/SECRETARY/DIRECTOR
FINRA requires brokerage firms to conduct due diligence on investments and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. Brokerage firms that fail to conduct adequate due diligence or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
If you suffered losses investing with Cambridge Investment Research and would like a free consultation with a securities attorney, then please call Galvin Legal, PLLC at 1-800-405-5117.
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