SALT LAKE CITY — Zions Bank subsidiary Zions Direct Inc. has been fined $225,000 by a private regulatory body for failing to disclose that one of its bidders in certificates of deposit auctions was an affiliated partner.

The Financial Industry Regulatory Authority announced the fine Wednesday after the broker-dealer firm had settled the matter and paid the fine while neither admitting nor denying the charges.

The bank consented to the entry of FINRA's findings.

The potential conflict of interest started in February 2007, when Salt Lake-based Zions Direct started auctioning CDs without telling buyers that its affiliate, Liquid Asset Management, was participating in the auction, according to FINRA. The problem was fixed by November of that year, but the damage had already been done, according to the authority.

"Firms are obligated to disclose to customers and prospective customers material information about their products and services," said James S. Shorris, FINRA executive vice president and acting chief of enforcement.

"Here, the CD auction participants were never told that they were effectively competing against Zions Direct's affiliate in the firm's own auctions, and that, as a result, bidders may receive lower yields."

Another allegation against Zions Direct was that it sent advertisements related to its CD auctions that contained misleading, unwarranted and exaggerated statements and claims, and claims for which no reasonable basis had been provided.

Zions Bank Vice President Rob Brough said Zions Direct has worked well with FINRA.

"Zions Direct has a historically strong record of compliance over its operating history and believes that it has now corrected the issues that were at play," he said.

For more information, or to check on brokers and investors, visit finra.org.