(Bloomberg) -- David Lerner was banned from the securities industry for a year and his firm ordered to pay $12 million for misleading investors into buying real estate investment trusts, regulators said.

Lerner, whose David Lerner Associates Inc. has underwritten about $7 billion of its Apple REITs, was also fined $250,000, the Financial Industry Regulatory Authority said today in a statement. The Syosset, New York-based brokerage, known for its founder’s “Take a tip from Poppy” advertising slogan, convinced elderly customers to invest by exaggerating the performance of older Apple REITs, Wall Street’s self-funded regulator said.

Lerner personally misled over 1,000 customers at four or more seminars, calling the Apple REITs “a fabulous cash cow” and a “gold mine,” Finra said. He cited the success of previous investment pools without telling prospective investors that those REITs were partially funding their payouts by borrowing money, the regulator said.

“David Lerner and his firm targeted unsophisticated and elderly customers, grossly failing to comply with basic standards of suitability,” Brad Bennett, Finra’s chief of enforcement, said in the statement. “Firms must conduct a thorough suitability analysis before selling products, and make accurate disclosure of risks and features.”

Lerner’s Suspension

Lerner agreed to repay the $12 million to investors without admitting or denying Finra’s claims. The firm “decided it is time to move the company past these distractions and settle with the regulators,” said Joseph Pickard, its general counsel. His statement was e-mailed by David Chauvin, an outside spokesman at Zimmerman/Edselson Inc.

“I am thankful for the tens of thousands of investors who have remained steadfast and loyal to David Lerner Associates,” Lerner said in the statement. “Most of all, I am confident that the future remains bright.”

John Dempsey, who’s worked for Lerner for 33 years, will run the firm during the suspension, according to the statement.

Finra also fined David Lerner Associates $2.3 million for overcharging on municipal bonds and mortgage investments. William Mason, the firm’s head trader, was ordered to pay $200,000 and suspended for six months, according to the statement. The company marked up bonds by as much as 23 percent, Finra said.

Boca Raton

Finra cited a presentation Lerner made to about 100 customers and prospective investors at the Boca Raton Marriott in Florida last year. The regulator claimed he said one of the Apple REITs “averaged 7.62 percent over the last four years. That’s been the return -- the dividend return for our investors.”

Lerner told investors that the program’s prospects were so good that they’d name their children after him, Finra said.

Last year, a group of investors sued David Lerner Associates over the Apple REITs, saying the firm didn’t disclose “substantial unrealized losses.”

The brokerage earned $600 million selling the investment pools, accounting for more than 60 percent of its business since 1996, Finra said. It charged a 10 percent fee on each sale, the regulator said.