Zions Direct, based in Salt Lake City, agreed to pay $225K to settle FINRA charges it failed to disclose the potential conflict of interest ("COI") created by the participation of an affiliate (Liquid Asset Management, or "LAM") in online CD auctions conducted by Zions involving certificates of deposit issued by Zions-affiliated banks.

Zions Direct, which began auctioning CDs through its website in early 2007, prior to November 2008 had failed to disclose LAM's participation in the auctions to retail investors bidding in the auctions.  LAM's participation may have lowered the closing yields in some auctions - effectively disadvantaging other auction participants, including retail customers, who may have received lower CD yields than they would have otherwise.  On the flip side, LAM's affiliates, the issuing banks, benefited by the lower interest costs.