According to FINRA, Martin Lerner of Delray Beach, Florida was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in any principal capacity for one month for failing to reasonably supervise sales of illiquid, proprietary limited partnerships.

Lerner was aware of but failed to reasonably investigate and respond to red flags of potentially unsuitable recommendations. These red flags included patterns of sales of illiquid limited partnerships to seniors and unsophisticated investors.

Particularly concerning were sales made contemporaneously with changes to customers' investment profiles—including liquid net worth and risk tolerance modifications—that resulted in customers meeting eligibility criteria they would not have met without those changes.

When Lerner learned of these red flags, rather than investigating to confirm the products were suitable, he approved the sales without further inquiry.

Supervisors have an obligation to respond to red flags. When a pattern emerges of investment profiles being changed to make customers eligible for purchases, reasonable supervision requires inquiry into whether those changes are legitimate or whether they represent attempts to circumvent suitability requirements.

Approving sales without investigating red flags allows unsuitable recommendations to proceed and harms customers who rely on the firm's supervisory system for protection.

The suspension was in effect from June 2 through July 1, 2025.

This case is part of a series of actions against David Lerner Associates and its personnel for unsuitable sales of proprietary limited partnerships to seniors and other vulnerable investors.

Investors should be alert if their investment profile is modified in connection with a purchase recommendation. Such changes should be initiated by you based on genuine changes in your circumstances, not to facilitate a particular investment.