Four brokerages to repurchase auction rate securities, pay $550K in fines

The Financial Industry Regulation Authority Inc. has reached an agreement with four brokerage firms to repurchase $554 million in auction rate securities from clients, and also pay a combined $850,000 in fines to settle charges that they misled investors by marketing these debt instruments as risk-free. Cleveland-based NatCity Investments Inc. was fined $300,000; Buffalo-based M&T Securities Inc. was fined $200,000; Philadelphia-based Janney Montgomery Scott LLC was fined $200,000; and M&I Financial Advisors Inc., which is based in Milwaukee, was fined $150,000, New York and Washington-based Finra revealed in an announcement today. As part of the settlement, these brokerages neither admitted nor denied the charges brought by Finra, according to the announcement. With this latest round of settlements, Finra has now settled auction rate securities charges with nine firms. Combined, these firms have paid more than $2.6 million in fines to the authority, and have agreed to return more than $1.2 billion to investors who purchased the instruments.