The $2.3m fine is related to charging unfair prices on municipal bonds and collateralized mortgage obligations (CMOs), the company marketed over a 30 month period, and for related supervisory violations.
It has also ordered to pay nearly $12m to affected customers who purchased shares in Apple REIT Ten, a non-traded $2bn Real Estate Investment Trust (REIT).
The market regulator accused the firm for taking advantage of being the sole distributor of Apple REITs, and selling the illiquid REIT without verifying whether it was suitable for investors.
FINRA executive vice president and chief of Enforcement Brad Bennett said, "Firms must conduct a thorough suitability analysis before selling products, and make accurate disclosure of risks and features at the point of sale, especially with alternative investments such as non-traded REITs."
The US watchdog has also fined its founder, president and CEO David Lerner, $250,000, and barred him for one year from the securities industry, followed by a two-year suspension from acting as a principal.
FINRA also sanctioned DLA’s head trader, William Mason, $200,000, and suspended him for six months from the securities industry for his role in charging excessive muni and CMO markups.
The firm has also agreed to appoint independent consultants to review and propose changes to its supervisory systems and training on both sales of non-traded REITs and pricing of CMOs and municipal bonds.
