The regulator also ordered the firm to pay restitution of more than $1.4m and interest, to affected customers.
FINRA charged DLA for excessive markups on municipal bond and accumulating and collateralized mortgage obligation (CMO) transactions over a two-year period.
The regulatory agency argued that due to these unfair practices, the firm forced its retail customers to pay unfairly high prices and receive lower yields than they otherwise would have received.
The watchdog also fined DLA’s head trader William Mason $200,000 and barred him for six months from the securities industry.
According to FINRA, from January 2005 to January 2007, DLA and Mason charged retail customers excessive markups in more than 1,500 municipal bond transactions and charged excessive markups in more than 1,700 CMO transactions.
FINRA said that the municipal bonds and CMOs in the transactions were all rated investment grade or above, and were readily available in the market at significantly lower prices than DLA charged.
The panel’s decision notes that in keeping with their unwillingness to accept responsibility, DLA has not taken any corrective measures to improve their fixed income markups policies and practices.
