**Update: 3/29/2021** On March 29, 2021, FINRA and Cambridge Investment Research, Inc. entered into a Letter of Acceptance, Waiver, and Consent (AWC) whereby Cambridge accepted sanctions including a censure, $400,000 fine, and over $3.1 million in restitution. FINRA alleged that Cambridge failed to reasonably supervise representatives’ recommendations of the LJM Preservation & Growth Fund. Cambridge representatives 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. To read more, click on the following link: FINRA Sanctions Cambridge Investment Research, Inc. For Failing to Supervise the Sale of the LJM Preservation and Growth Fund
See also:
- FINRA Sanctions Securities America, Inc. For Failing to Supervise the Sale of the LJM Preservation and Growth Fund
- FINRA Sanctions J.W. Cole Financial, Inc. For Failing to Supervise the Sale of the LJM Preservation and Growth Fund
Original Post:
Iorio Altamirano LLP Investigates Cambridge Investment Research, Inc. Over Sale of LJM Preservation and Growth Fund
Iorio Altamirano LLP is investigating claims on behalf of Cambridge Investment Research, Inc. customers who invested in the LJM Preservation and Growth Fund. Such investors are advised to contact New York securities arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com, or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
On March 11, 2021, InvestmentNews published an article titled “Cambridge Investment Research working on Finra settlement over alt fund sales.” The article reported that Cambridge’s latest filing with the SEC revealed that it was being investigated by regulators for its sales of a small alternatives fund that blew up in 2018 and is now defunct.
Cambridge Investment Research, Inc.
Cambridge Investment Research, Inc. is a full-service broker-dealer. The firm has been a FINRA member since December 1995 and is headquartered in Fairfield, Iowa. According to the InvestmentNews article, Cambridge generated $1 billion in total revenues at the end of 2019 and had 3,400 registered reps and financial advisers on its platform.
Cambridge’s Financial Report, dated December 31, 2020, disclosed that “FINRA’s Department of Enforcement initiated an investigation into the Company’s due diligence and supervision related to the sale of the LJM Preservation and Growth Fund. The Company denied any wrongdoing and, through outside counsel, presented various factual and legal defenses. The Company and FINRA exchanged various information, and the parties are negotiating a potential resolution.”
LJM Preservation and Growth Fund
According to a Reuters report, the LJM Preservation and Growth Fund was a mutual fund aimed at a retail audience. The fund sold to customers in the following investment classes: Class A: (LJMAX), Class C: (LJMCX), Class I: (LJMIX).
The LJM Preservation and Growth Fund had $805M in assets under management in late January 2018. By early March 2018, it dropped to $9.8M.
LJM Partners and an affiliate saw losses of 80 percent or more. This compelled LJM to liquidate the fund.
Firms Involved in Sales of LJM Preservation and Growth Fund
According to public records, other firms and advisors who sold the LJM Preservation and Growth Fund to customers include:
- Thomas A. Carroll and Summit Investment Management, Ltd., an SEC-registered investment adviser in Milwaukee, Wisconsin.
- Jon James Melander and Valmark Securities, Inc., a broker-dealer in Akron, Ohio.
The Chadwick & D’Amato Fund
According to public filings, the now-defunct Chadwick & D’Amato Fund (CDFFX) invested over $4.7 million into the LJM Preservation and Growth Fund. The Chadwick & D’Amato Fund reportedly had returns of -24.6% in 2019 and -14.4% in 2020. Investors who have invested in the Chadwick & D’Amato Fund and suffered losses are also advised to contact Iorio Altamirano LLP for a free consultation.
How to Recover Losses or Obtain a Free Consultation
If you are a Cambridge Investment Research, Inc. customer or a customer at another firm, and your broker recommended that you invest in the LJM Preservation and Growth Fund, we are interested in speaking with you. Contact New York securities arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We have experience representing institutional and retail investors in pursuing claims to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.