David Lerner Associates, Inc (DLA) has agreed to pay restitution of $1,002,566 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

From January 2015 through November 2019, DLA’s representatives recommended two illiquid, proprietary limited partnerships to thousands of customers. DLA’s supervisory system, however, was not reasonably designed to achieve compliance with FINRA’s suitability rule.

DLA also failed to reasonably respond to red flags that its representatives were making unsuitable recommendations of the limited partnerships to customers. In total, DLA, through its representatives, made unsuitable recommendations to 200 customers.

For these violations of FINRA Rules 3110, 2111, and 2010, the firm is censured, ordered to pay restitution of $1,002,566, and required to undertake to re- confirm select customer investment profile information.

The firm also is suspended from engaging in the sale of proprietary, illiquid products, for two years.

DLA has been a FINRA member since 1970. DLA, headquartered in Syosset, NY, is a privately held broker-dealer that conducts a retail brokerage business out of eight branch offices. DLA has approximately 120 registered representatives.