D.H. Blair, Execs to Pay Fine for Markups

D.H. Blair & Co., a New York-based brokerage, and two of its executives were ordered to pay about $4.9 million in fines and restitution for what regulators called fraudulent overcharging of customers on stock trades. The settlement, under which D.H. Blair neither admitted nor denied wrongdoing, is one of the largest ever imposed by the National Assn. of Securities Dealers on an active firm, an NASD spokesman said. D.H. Blair agreed to pay a $2-million fine and refund $2.4 million to 3,100 investors, the NASD said. The firm’s chief executive, Kenton E. Wood, was fined $225,000 and suspended from the industry for 60 days. Its head of over-the-counter trading, Vito Capotorto, was fined $300,000 and suspended for 90 days. Lawyers for Wood and Capotorto did not respond to requests for comment. The NASD alleged that D.H. Blair overcharged customers by more than 10% on 1,100 transactions in 14 securities underwritten by the firm in initial public offerings between June 1993 and May 1995. Any stock markup of more than 10% is considered fraudulent by the NASD.