Louis Capital Markets LP has agreed to settle charges that it allegedly initiated an illicit scheme to obtain undisclosed trading fees from its customers.

According to the Securities and Exchange Commission, the company cash and equity desk secretly charged its clients markups and markdowns to their trades from 2008 to late 2012. Customers allegedly paid the undisclosed trading fees in addition to small commissions the company was already charging them.

To conceal the fees, brokers gave false prices and added the markups and markdowns during times clients were unlikely to detect them, for example during market volatility, the regulator said.

Louis Capital Markets did not admit or deny the findings, but agreed to a cease-and-desist order, a censure and payment of $2.5 million in disgorgement.