SEC Charges Cambridge Investment Research with Conflicts of Interest 

SEC Alleges Cambridge Investment Research Breached its Fiduciary Duty with Mutual Fund Overcharges 

According to a press release on March 2, 2022, the Securities and Exchange Commission charged Cambridge Investment Research Advisors, Inc. a registered investment advisor based in Fairfield, Iowa, with breaching its fiduciary duty by failing to disclose material conflicts of interest related to its selection of mutual funds and wrap accounts for clients.

Since at least 2014, the firm allegedly failed to disclose material conflicts of interest to its clients, according to the SEC’s complaint. Specifically, the complaint alleges that Cambridge Investment invested client assets in certain mutual funds and money market sweep funds that generated millions of dollars in revenue sharing payments to an affiliated broker-dealer, Cambridge Investment Research, Inc., instead of lower-cost share classes and investment options that would have yielded less or no revenue sharing.  

The SEC’s complaint alleges that this practice also allowed the firm to avoid paying millions of dollars in transaction fees. Cambridge Investment also purportedly converted hundreds of accounts to its more expensive wrap account program without adequate disclosure and without analyzing whether doing so was in its clients’ best interests.  

The firm allegedly failed to disclose that its investment advisors received compensation in the form of forgivable loans in exchange for meeting certain criteria such as maintaining certain asset levels and tenure with the firm. 

The complaint, which also names Cambridge Investment Research as a relief defendant, was filed in a federal court in the Southern District of Iowa. The SEC seeks a permanent injunction, disgorgement including prejudgment interest, and civil penalties.  

Potential to Recover Financial Losses  

If you are concerned about your investments with  Cambridge Investment Research Advisors, Inc., please call the securities attorneys of The White Law Group at 888-637-5510 for a free consultation.  

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 The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.  The firm represents investors in FINRA arbitration claims throughout the country.  For more information on the firm, visit http://whitesecuritieslaw.com.