Cambridge Legacy Securities of Dallas, TX, and 2 of its Principals settled FINRA charges relating to numerous violations at one of its branches.  The firm, acting through its president, failed to implement an adequate system to supervise a branch office’s activities in light of deficiencies identified during branch audits.  They also failed to appoint a properly qualified principal to serve as BOM and supervise the branch office’s activities.  Specifically...........

• The president and a branch principal were permitted to accept a gift/gratuity in excess of $100 from the president and general partner of an entity that offered an alternative investment product - branch principal had sold almost $6 million of the product to branch customers.

• Customers of the branch principal were charged both commissions ($434,589.03) and advisory fees (annual %-based) on transactions in the alternative investment products.

• Some solicited sales of the nonliquid alternative investments by branch principal were unsuitable, given their age, financial needs, annual income, liquid net worth and risk tolerance.

In addition, FINRA charged the Firm with inadequate supervision of communications was inadequate:  (i) failed to properly maintain email communications;  (ii) president's email, designated as legal and confidential, was not reviewed or properly maintained;  (iii) internal communications and correspondence were not adequately supervised.

    Fines and Sanctions.   The firm agreed to pay $72K, plus interest, in fines and restitution to customers.  President agreed to $25K in fines and a 3-month suspension as a principal.  Branch principal agreed to pay $438K, plus interest, in fines and restitution, along with a 9-month suspension.  [FINRA September Disciplinary Actions]