Cambridge to Pay $3.5 Million In Restitution To Settle FINRA Mutual Fund Case

Posted on April 13th, 2021 at 9:22 AM

From the Desk of Jim Eccleston at Eccleston Law LLC:

Cambridge Investment Research failed to supervise the recommendations of a mutual fund by its 4,400 financial advisors in 2,500 offices, according to a settlement agreement (Acceptance, Waiver and Consent or “AWC”) filed with the Financial Industry Regulatory Authority (FINRA). 

According to Cambridge’s settlement with FINRA, a financial advisor of Cambridge Investment Research sold more than 80 percent of the shares in the LJM Preservation & Growth Fund. Unfortunately for customers,  “volmageddon” of February 2018 brought a record point decline in the Dow that wiped out 98 percent of the fund’s assets. 

FINRA investigators noted that the firm sold shares to 550 customers. FINRA  also stated, “Cambridge did not adequately train the advisors in alternative mutual funds or design due diligence and suitability reviews.” 

Cambridge allowed the sale of LJM on its platform without conducting reasonable due diligence and without a sufficient understanding of its risks and features, including the fact that the fund pursued a risky strategy that relied, in part, on purchasing uncovered options, according to FINRA. The settlement requires Cambridge to pay a fine of $400,000 and restitution of $3.13 million while revising its procedures. 

Eccleston Law LLC represents investors and financial advisors nationwide. Please contact us to discuss any issues that you may have.

 

Tags: eccleston, eccleston law, cambridge investment research, finra, restitution

Return to Archive

TESTIMONIALS

Previous
Next

I cannot thank you enough for your efforts. You have proven to be a valuable resource

Jim T.

LATEST NEWS AND ARTICLES

December 23, 2024
Understanding Alternative Investments and Risk Management

Alternative investments once again are gaining traction, according to a recent article in InvestmentNews

December 20, 2024
FINRA Sanctions Over 60 Advisors for Continuing Education Violations

FINRA has disciplined 62 advisors for cheating on New York’s continuing education (CE) requirements tied to insurance license renewals. 

December 19, 2024
GPB Capital Investors See Progress as Court Confirms Receivership

In a significant development for investors in GPB Capital Holdings, the private equity firm will move into receivership following a prolonged legal battle.