The Financial Industry Regulatory Authority Thursday announced settlements with four more firms to resolve charges relating to the sale of Auction Rate Securities, which were rendered illiquid when auctions froze in February 2008.

The latest settlements are with NatCity Investments, Inc., which was fined US$300,000; M&T Securities, Inc. and Janney Montgomery Scott LLC, which were each fined US$200,000; and M&I Financial Advisors, Inc. which received a US$150,000 fine. All four firms also agreed to offer to repurchase ARS sold to their customers where the auctions had failed. In concluding the settlements, the firms neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

FINRA said its investigation found that the firms failed to adequately disclose to customers the potential for ARS auctions to fail and the consequences of such failures. It also found evidence that each firm failed to establish and maintain a supervisory system reasonably designed to achieve compliance with the securities laws and FINRA rules.

To date, FINRA has concluded final settlements with nine firms, imposing a total of US$2.6 million in fines and guaranteeing the return of more than US$1.2 billion to investors. Investigations continue at a number of additional firms, it said.

IE