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FINRA Fines and Suspends Former Cambridge Advisor for Reg BI Violations

FINRA Fines and Suspends Former Cambridge Advisor for Reg BI Violations. Broker-dealer, brokerage, Financial Industry Regulatory Authority, financial services, FINRA, RIA
FINRA Fines and Suspends Former Cambridge Advisor for Reg BI Violations. Broker-dealer, brokerage, Financial Industry Regulatory Authority, financial services, FINRA, RIA

The Financial Industry Regulatory Authority and Malay Kumar have agreed to settle charges that Kumar violated provisions of Regulation Best Interest while affiliated with Cambridge Investment Research Inc.

Between June 2018 and October 2021, FINRA says Kumar recommended that seven of his customers exchange variable annuities without reasonably considering the impact of the substantial surrender fees and the loss of benefits and liquidity caused by the exchanges. As a result, Kumar allegedly did not have a reasonable basis to believe that his recommendations were suitable or, after June 30, 2020, in his customers’ best interest. Collectively, these exchange recommendations caused Kumar’s customers to incur $50,103 in surrender fees.

Between May 2018 and October 2021, Kumar provided inaccurate information about the source of funds on the transaction documents he submitted to the firm and the annuity issuers, according to FINRA. Specifically, FINRA says Kumar failed to identify and submit eighteen variable annuity purchases as exchanges even though each purchase was funded by the sale of another variable annuity. In doing so, Kumar caused his firm to create and maintain inaccurate books and records. As such, Kumar violated FINRA rules by falsifying documents and making false statements and he separately violated FINRA rules by causing his firm to maintain inaccurate books and records.

Kumar consented to a twelve-month suspension from associating with any FINRA member in all capacities, a $10,000 fine and restitution of $50,103.43 plus interest.

According to BrokerCheck, Kumar has been affiliated with 11 firms since 1996.

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