FINRA Panel Awards Punitive Damages

Earlier this month, a Financial Industry Regulatory Authority (“FINRA”) arbitration panel awarded a customer $1.5 million, including $900,000 in punitive damages, against Dallas-based Cambridge Legacy Securities, LLC (“Cambridge”).

The FINRA claim alleged that Cambridge recommended unsuitable limited partnerships to the customer who was in his 70s. The customer alleged that his Cambridge broker invested nearly two-thirds of his liquid net worth in high-risk, illiquid real-estate related limited partnerships that invested in ventures such as marinas and hotels. The FINRA claim alleged that Cambridge relied on the information provided by the issuer instead of conducting independent due diligence on the investments, as required by securities rules.

Without providing the rationale for its decision, the arbitration panel awarded the customer $444,000 in compensatory damages, $900,000 in punitive damages, $150,000 in attorney’s fees and $12,000 in costs.

According to Cambridge’s FINRA Brokercheck report, the firm was previously censured by FINRA in 2010 for failing to conduct adequate due diligence on private placement offerings.

The Florida securities lawyers at Rabin Kammerer Johnson represent investors nationwide in FINRA arbitration matters. Investors nationwide who have incurred recoverable investment losses due to specific failures by stockbrokers and brokerage firms, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at Rabin Kammerer Johnson for a free and confidential consultation by calling toll free at 877.915.4040.