FINRA suspended Cambridge Legacy Securities LLC ("CLS") registered principal Oran Ben Carroll and fined him $50,000 for failure to conduct adequate due diligence of private placements of which CLS sold nearly $23 million and failure to establish, maintain and enforce adequate supervisory systems, including written supervisory procedures ("WSPs").
According to the findings, CLS sold over $22 million in interests of five private placements offered by the Cambridge Petroleum Group, of which Carroll is co-General Partner. CLS also sold $900,000 in a Cambridge Legacy Group offering.
FINRA believes that from Carroll specifically failed to conduct adequate due diligence in relation to both the Petroleum and Legacy Group offerings and that from 2008 through at least 2010, Carroll failed to enforce CLS's WSPs that required it to conduct the aforementioned adequate due diligence for all private placements sold by the firm.
Investigators charged Carroll with failing to ensure the firm created and maintained due diligence files, further alleging that CLS failed to conduct ongoing due diligence on the Petroleum and Legacy Group offerings, as would be required by CLS's WSPs.
The findings additionally state that in 2010, CLS sold interests in multiple Petroleum Group offerings in violation of the 1933 Securities Act, specifically the regulations pertaining to Regulation D's general solicitation prohibition.
Because CLS sold the offerings while detailed information about the offerings was publicly accessible, FINRA believes that constituted a general solicitation, rendering CLS and Carroll's conduct in selling the offerings violative and in contravention with FINRA rules.
Carroll has been sanctioned before.
In 2006, FINRA censured and fined Carroll $10,000 for allegedly allowing two customers' funds to be mistakenly deposited into the firm's operating account, causing the firm to be net capital deficient.
In 2010, the State of New York Insurance Department fined Carroll $750 for providing incorrect information on an application to become a licensed insurance agent in New York state.
Later in 2010, FINRA fined Carroll $25,000 and suspended him for three months for similar charges of failure to implement an adequate supervisory system at CLS. FINRA also charged the firm with failure to properly maintain e-mail communications.
If you have invested with Oran Ben Carroll, Cambridge Legacy Securities or invested in the Cambridge Petroleum Group, Cambridge Legacy Group or with any broker or firm that has failed to conduct adequate due diligence and/or adhere to supervisory policy, and such misconduct has proven harmful to your investments, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.