A Financial Industry Regulatory Authority (“FINRA”) Hearing Panel has fined David Lerner & Associates (“DLA”) $2.3 million for charging excessive markups on municipal bond and collateralized mortgage obligations (“CMOs”) during the period January 2005 to January 2007. In addition to the fine, DLA has been ordered to pay $1.4 million in restitution to its customers. FINRA announced that the Hearing Panel also fined DLA’s head trader, William Mason, $200,000 and suspended him from the securities industry for six months.
FINRA found that DLA charged excessive markups to its customers in more than 1,000 municipal bond transactions and over 1,700 CMO transactions during this 2 year period. FINRA rules require that markups be fair and reasonable. According to the FINRA Panel, DLA’s municipal and CMO trades reflected a pattern of intentional excessive markups charged to DLA’s customers.
If the Hearing Panel’s decision is not appealed to the National Adjudicatory Council, the decision will become final after 45 days.
In December, FINRA filed an amended complaint against DLA alleging the firm made false and misleading claims to potential investors in connection with the sale of Apple REITs. That matter is still pending.
The Florida securities lawyers at McCabe Rabin, P.A. 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 McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to email@example.com