Delaware Reaches $1.05 Million-Plus Settlement with Cambridge Investment Research over Unmanaged Accounts Still Charged Fees
The Delaware Department of Justice announced on October 16 that Attorney General Kathy Jennings has reached a settlement with Cambridge Investment Research, Inc. and Cambridge Investment Research Advisors, Inc., resolving an investigation by the Department's Securities Unit. Under the consent order, signed October 9, the firms will pay $950,000 in penalties and $50,000 in costs and will pay $52,465 in restitution to affected customers — more than $1.05 million in total.
The Securities Unit found that after one of Cambridge's investment adviser representatives left the firm, the adviser's customer accounts went unmanaged for nearly a year while the customers continued to be charged advisory fees. The Department alleged that Cambridge failed to reasonably supervise its investment adviser representatives, failed to detect that the accounts were unmanaged after the departure, and failed to stop charging the fees in a timely manner, in violation of the Delaware Securities Act and the Delaware Uniform Securities Code.
Announcing the settlement, Jennings said a company that charges customers for services it is not providing will be held accountable. The settlement also requires Cambridge to implement measures designed to prevent similar failures. Investor Protection Director Jill Sharp said advisory firms are reasonably obligated to supervise their advisers and to promptly reassign customer accounts when an adviser departs.
The Department said Cambridge cooperated in the investigation and received a corresponding reduction in the settlement amount for its cooperation.
Published by GSM · USA (original Chinese edition)
Photo: 图：特拉华州总检察长凯西·詹宁斯在记者会上发言（资料图）。图片来源：美国消费者金融保护局（CFPB），公共领域。Photo: Delaware Attorney General Kathy Jennings speaks at a press conference (file photo). Image: Consumer Financial Protection Bureau, public domain.
