Cambridge Investment Research Regulatory Overview

The White Law Group is investigating potential securities claims involving Cambridge Investment Research Inc. 

Cambridge Investment Research, (CRD# 39543, Fairfield, Iowa), a national financial advisory firm headquartered in Fairfield, Iowa, reportedly has 16 disclosure events on its broker record including 12 regulatory events, and 4 arbitrations, according to the Financial Industry Regulatory Authority (FINRA).

Mutual Fund Overcharges

December 20th, 2024: FINRA has reportedly censured Cambridge Investment Research for customer overcharges. The firm will reportedly pay restitution of $699,217 plus interest to affected customers.  Between January 2015 and March 2022, Cambridge Investment Research failed to establish and maintain a system reasonably designed to supervise the application of sales charge waivers and fee rebates to which customers were entitled through rights of reinstatement offered by mutual fund companies.  Cambridge Investment Research violated FINRA Rules 3110 and 2010.

SEC Bars Sean Michael Kane after Allegations of Misconduct

November 13th, 2024: The SEC has reportedly barred Sean Michael Kane, a financial advisor from Philadelphia, for allegedly deceiving clients about his firing and purportedly impersonating them to conduct transactions, according to a press release. 
Kane was reportedly affiliated with Cambridge Investment Research in York, PA from March 2021 until March 2023 when he was purportedly terminated.

Cambridge Investment Broker Edward Mercer Barred 

November 15, 2023: FINRA, the self-regulator that oversees brokers and brokerage firms, has reportedly barred financial advisor Edward “Ed” Mercer (CRD#: 1839328). Mercer reportedly refused to appear for on-the-record testimony requested by FINRA in connection with its investigation into a customer’s investment in a crypto asset offering away from his member firm.

Cambridge Fined for  LJM fund Sales

March 17, 2021: According to FINRA, Cambridge failed to reasonably supervise representatives’ recommendations of an alternative mutual fund—the LJM Preservation & Growth Fund (LJM). Cambridge purportedly permitted the sale of LJM on its platform without conducting reasonable due diligence and without a sufficient understanding of its risks and features. The fund pursued a risky strategy that relied, in part, on purchasing uncovered options.

Cambridge also reportedly lacked a reasonable supervisory system to review representatives’ LJM  recommendations. Cambridge representatives reportedly sold more than $18 million in LJM to customers. LJM’s value dropped 80% during an extreme volatility event in February 2018 and the fund ultimately liquidated and closed, resulting in millions of dollars in losses for Cambridge’s customers. Cambridge was reportedly required to pay a $400,000 fine and restitution of $3,134,354.82 plus interest.

The White Law Group received numerous calls from investors who lost big in  LJM Preservation and Growth Fund, a mutual fund targeted to retail investors which lost half its value earlier that month as volatility in trading spiked, according to numerous reports. The fund then lost most of its  remaining value soon after.

FINRA Sanctions Cambridge for Alleged Customer Overcharges and Excess Commissions 

December 2019: Cambridge Investment Research was issued an AWC on December 31, 2019 in which the firm was censured and fined $150,000 after the firm allegedly failed to reasonably supervise short-term trading of UITs and mutual fund Class A shares.

The alleged lack of sufficient guidance to firm principals allowed at least one of its representatives to purportedly engage in unsuitable short-term trading in mutual fund Class A shares.

FINRA’s findings also stated that the firm’s system for  monitoring commissions failed. Some of the firm’s representatives apparently executed transactions that allegedly 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.

Cambridge Advisor Lynn Cawthorne Barred after Alleged Felony 

November 16, 2020: The Financial Industry Regulatory Authority (FINRA) reportedly barred ex-Cambridge financial advisor Lynn Cawthorne after Cawthorne was indicted in the U.S. District Court for the Western District of Louisiana on seven felony counts of wire fraud and one felony count of conspiracy to commit wire fraud in connection with allegedly misappropriating approximately $536,000 from a government program.

According to his broker profile, Cawthorne was reportedly affiliated with Cambridge Investment Research Co. in Shreveport, LA, from 2013 until 2018 when he was reportedly dismissed after he “failed to report ongoing criminal investigation.”

Filing a Complaint against your Brokerage Firm

All broker-dealers have a responsibility to adequately supervise its employees. They must ensure the necessary procedures and systems to detect misconduct.  Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.

When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration.

Free Consultation with a Securities Attorney

The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington.

If you have concerns regarding investments you purchased through Cambridge Investment Research Inc.  and would like to speak with a securities attorney, please call The White Law Group at 888-637-5510.