Syosset securities brokerage David Lerner Associates Inc. has agreed to pay $650,000 in civil penalties and other costs to resolve an investigation by the New Jersey Bureau of Securities into its sales of real estate investment trusts.

In an announcement last week, the bureau said it found that supervisors at the 41-year-old investment firm sold REITs that were not traded on an exchange to unsuitable investors in New Jersey and failed to keep adequate records of the securities’ sales from March 2006 to December 2010.

David Lerner Associates on Tuesday issued a statement saying that it had updated its procedures, requirements and oversight on REIT sales.

“The overwhelming majority of New Jersey accounts that invested in Apple Seven, Eight and Nine realized positive returns on their investment and the small handful that did not have been voluntarily made whole by DLA,” the statement said. “The firm agreed to resolve this matter without admitting or denying the bureau’s allegations.”

Under the consent order, the securities firm agreed to pay a $700,000 civil penalty, $100,000 in investigative costs and $50,000 to be placed in the bureau’s investor education program. The agency suspended $200,000 of the civil penalty for the brokerage firm’s “substantial cooperation” with the investigation.

“This enforcement action puts the securities industry on notice that the Bureau will take action when firms expose clients to increased financial risks by skirting the laws and regulations in place to protect them,” New Jersey Attorney General Christopher Porrino said in a statement.

advertisement | advertise on newsday

In addition to Syosset, David Lerner Associates has offices in White Plains, Westport, Connecticut, Boca Raton, Florida, and Lawrenceville and Teaneck, New Jersey, according to the company website.

New Jersey officials said they fielded complaints from investors about three REITs marketed by David Lerner Associates — Apple REIT Seven, Apple REIT Eight and Apple REIT Nine. Those securities raised a total of $4 billion between March 2006 and December 2010 to purchase hotels.

The investigation by a third-party consultant found that David Lerner Associates sold the REITs to investors who did not meet the suitability standards in the prospectus of the securities and failed to keep records regarding the investor’s net worth, income or investment objective in at least 40 accounts that held the Apple REITs.

Non-traded REITs may carry higher fees and more risk because they are illiquid, officials said. After the investigation began, the three Apple REITs were merged and listed on the New York Stock Exchange.