SEC v. Cambridge Investment Research Advisors, Inc.

Cambridge Investment Research Advisors, Inc. allegedly failed to disclose material conflicts of interest and breaching its duty of care related to its recommendation to place clients in wrap accounts and its selection of mutual funds and money market sweep funds for clients, according to the SEC. CIRA allegedly breached its fiduciary duty to advisory clients by investing 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. (CIRI), instead of lower-cost share classes and investment options. CIRA allegedly converted hundreds of accounts to its more expensive wrap account program without adequate disclosure. CIRA also allegedly failed to disclose conflicts resulting from its investment adviser representatives’ receipt of forgivable loans in exchange for maintaining certain asset levels and tenure with CIRI, according to the complaint.

Summary generated from official Securities and Exchange Commission press release