AWC/2009020319001
Cambridge failed to have reasonable grounds to believe that a private placement offered pursuant to Regulation D was suitable for any customer.
Acting through Fincher, its Chief Compliance Officer and registered principal, the Firm failed to
- conduct adequate due diligence of the private placement offering before allowing its brokers to sell the security,
- maintain a supervisory system reasonably designed to achieve compliance with applicable securities laws and regulations, and
- enforce reasonable supervisory procedures to detect or address potential red flags as it related to the offering.
Fincher was the principal responsible for conducting due diligence on the offering and approved the security as a new product available for firm brokers to sell to their customers; he allowed the firm’s brokers to continue selling the security despite its ongoing failure to make overdue interest and principal payments. The Firm failed to have reasonable grounds for allowing the continued sale of the security even though the firm, through Fincher, was aware of numerous red flags concerning liquidity problems, delinquencies and defaults, but allowed its brokers to continue selling the security.
Cambridge Legacy Securities, L.L.C.:Censured; Ordered to pay $218,400 in restitution to customers. If the firm fails to provide FINRA with proof of restitution, it shall immediately be suspended from FINRA membership until such proof has been provided.
Tommy Edward Fincher: Fined $5,000; Suspended 6 months in Principal capacity only.
- Accredited Investor
- Affirmative Determination
- AML
- Annual Compliance Certification
- Annual Compliance Meeting
- Annuities
- Annuity
- Appeal
- ATM
- Away Accounts
- Bank
- Bankruptcy
- Banks
- Best Efforts Offering
- Blank Forms
- Borrowed
- Borrowing
- Broadcast
- Campaign Contributions
- CCO
- CDs
- Check
- Check Kiting
- Checks
- Churning
- CIP
- Clearing Agreement
- CMO
- Commissions
- Communications
- Computers
- Concentration
- Confidential Customer Information
- Contingency Offering
- Continuing Education
- Conversion
- Corporate Credit Card
- Correspondence
- Credit Cards
- Customer Protection Rule
- Debit Card
- Deceased
- Discretion
- Do Not Call
- Due Diligence
- EIA
- Elderly
- Electronic Communications
- Electronic Storage
- Embezzled
- Escrow
- Estate
- ETF
- Expenses
- Expulsion
- False Statements
- Felony
- Finder Fees
- FINOP
- FOCUS
- Foreign Language
- FOREX
- Forgery
- Form ADV
- Freely-Tradable
- Futures
- Gifts
- Guaranteeing Against Losses
- Hedge Fund
- Heightened Supervision
- Impersonation
- Insider Trading
- Inspections
- Installment Plan Contracts
- Instant Messaging
- Insurance
- Internet
- Investment Advisor
- IRA
- Joint Account
- Life Insurance
- LOA
- Loan
- Loaning
- Margin
- Mark-Up Mark-Down
- Material Change Of Business
- Membership Agreement
- Minimum Contingency
- Money Laundering
- Mortgage
- Mutual Funds
- NAC
- Net Capital
- NSF
- Options
- OSJ
- Outside Accounts
- Outside Business Activities
- Parking
- PIPE
- Ponzi
- Power Of Attorney
- Private Placement
- Private Securities Transaction
- Producing Manager
- Production Quota
- Promissory Notes
- Proprietary Traders
- Public Appearances
- Referral Fees
- Reg D
- Reg U
- Regulation 60
- Regulation S-P
- REIT
- Research
- Reverse Mortgage
- RIA
- Rule 8210
- SAR
- SBA
- Scripts
- Shadowing
- Sharing Profits
- Signature
- Solicited
- Statutory Disqualification
- Stock To Cash
- Suitability
- Supervision
- Supervisory System
- Suspense Account
- Testing
- Third Party Vendor
- Time And Price Discretion
- Trading
- Trading Limits
- Trading Volume
- Trust Account
- Trustee
- U.S. Treasuries
- UIT
- Unauthorized Transaction
- Universal Lease Programs
- Unregistered Person
- Unregistered Principal
- Unregistered RRs
- Unregistered Securities
- Unregistered Supervisor
- Variable Annuity
- Variable Insurance
- Viaticals
- Website
- Willfully
- WSP
- WSPs