WASHINGTON — Four “downstream” brokerages agreed to buy back $554 million of auction-rate securities and to pay $850,000 in fines for sales practices violations and faulty supervisory procedures, the Financial Industry Regulatory Authority announced yesterday.

The self-regulator found that the four firms — Janney Montgomery Scott LLC, NatCity Investments Inc., M&T Securities Inc., and M&I Financial Advisors Inc. — failed to adequately disclose to customers the potential for ARS auctions to fail and the consequences of such failures.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.