Published on:

FINRA Fines David Lerner Associates

David Lerner Associates was recently ordered by the Financial Industry Regulatory Authority (FINRA) to pay more than $3.7 million in restitution and fines. The decision is a result of David Lerner’s practices in overcharging retail customers on sales of 1,700 collateralized debt obligations (CDOs) and over 1,500 municipal bonds transactions. The municipal bonds and CDOs were rated investment-grade or above. Securities fraud attorneys are currently consulting with customers of David Lerner.

FINRA Fines David Lerner Associates

From January 2005 through January 2007, David Lerner charged excessive markups which resulted in “unfairly high prices” and lower yields being incurred by customers, according to a release issued by FINRA. The FINRA panel stated that David Lerner’s trades “reflected a pattern of intentional excessive markups” for investments that could be obtained at “significantly lower prices.” These types of sales practices have gotten the attention of stock fraud lawyers, whose job it is to help investors who have been wronged by their broker or firm.

These unfair pricing practices apparently continued despite a letter of caution on the topic that followed a 2004 exam and Wells notices on the issue, which were received by David Lerner Associates in July 2009. This, combined with the fact that the firm “has not taken any corrective measures to improve their fixed income markups policies and practices” was taken into consideration by the panel when the sanctions were set.

The charges were originally brought by FINRA in May of 2010. FINRA’s decision includes a $2.3 million fine. Securities fraud attorneys say that $1.4 million, plus interest, of the total $3.7 million ordered is dedicated to paying restitution to customers affected by the firm’s sales practices, but other customers could have claims against David Lerner.

Investors who would like to discuss their transactions with David Lerner can contact a stock fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Contact Information