FINRA has fined Jefferies & Co. $1.5 million, ordered the investment bank to repay $425,000 in ill-gotten commissions and fees and suspended a pair of its brokers for failing to disclose additional compensation to institutional clients and other conflicts of interest related to shady sales of auction rate securities between August 2007 and March 2008.

FINRA found that Jefferies, through at least two brokers in its Corporate Cash Management investment advice group, didn't disclose "material facts" to a group of eight corporate customers for whom they were empowered to purchase and sell auction rate securities (ARS) and used this authority to buy new-issue ARS from other CCM group customers.

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