A broker with Cambridge Legacy Securities was heavily sanctioned for facilitating unapproved private transactions by customers of the firm.  Two firm customers invested in securities through Dallas-based Daniel Scott Sheedy, that were issued by the private entity in the form of investment agreements.  These agreements, which were provided by the private entity, stated that the company invested in and brokered life settlement contracts. 

Sheedy allegedly participated in the customers’ investments by reviewing the customers’ investment agreements, providing the customers with wiring instructions for the issuer, providing status updates to the customers regarding their investments and telling the customers to call him if they had any questions about their investments.

Sheedy communicated with the customers via an unapproved personal email account.  

The customers ultimately invested a total of $350,000 and, pursuant to the terms of the customers’ investment agreements, the customers were to receive return of their principals plus a total of $42,000 within 5 days of the end of their investment period for which certain life settlement contracts were invested. 

Neither customer received the return of their investment principal nor the promised investment returns, and all of their funds ultimately were lost.

For his "efforts," Sheedy was fined $25K and suspended for 2 years.  This is FINRA Case #2008015180901.   [Disciplinary Actions for June 2011] 

[C-I Question:  So why wasn't Mr. Sheedy barred from the industry?  His customers lost their $350K investment,and Sheedy conducted himself in a secretive manner that indicated he knew he was engaging in prohibited transactions.  It seems the fine doesn't match the crime.]