The Financial Industry Regulatory Authority (FINRA) said it had ordered David Lerner Associates Inc to pay about $12 million in restitution to investors, many of them elderly, who had bought into a non-traded $2 billion real estate investment trust (REIT), and to customers who were charged excessive markups.

Founder and Chief Executive David Lerner, who had described the REIT as a "fabulous cash cow'' and "gold mine'' in pitches to unsophisticated investors, was fined $250,000 and suspended from the securities industry for one year, followed by a two-year suspension from acting as a principal, the industry-funded watchdog said on Monday.

FINRA also said it had fined the Syosett, New York-based firm more than $2.3 million for charging unfair prices on municipal bonds and collateralized mortgage obligations.