The numbers are in, and they tell a story every investor should hear: the Financial Industry Regulatory Authority (FINRA) brought 44 formal enforcement actions involving Regulation Best Interest violations in 2025 — more than double the 21 cases filed in 2023 and a significant jump from the 38 cases in 2024.
Those 44 actions named 51 respondents: 19 brokerage firms and 32 individual brokers. The message from regulators is clear — the era of loose oversight is over, and firms that fail to put their clients’ interests first are facing real consequences.
The Three Patterns Driving Enforcement
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At FINRA’s annual conference in Washington, enforcement leaders laid out exactly where they’re finding problems. For investors who’ve suffered losses, these patterns are a roadmap to understanding whether your broker crossed a line.
1. Churning and Excessive Trading
This remains the “bread and butter” of Reg BI enforcement, according to William Thompson, FINRA’s vice president of enforcement.
Churning isn’t just active trading — it’s trading designed to generate commissions for the broker while draining the investor’s account through excessive fees. Thompson specifically called out the harm to senior investors, who are often targeted with this strategy and watch their retirement savings erode through unnecessary transaction costs.
FINRA is bringing these cases under Reg BI’s Care Obligation (the requirement that recommendations be in the client’s best interest) and the Compliance Obligation (the firm’s duty to supervise). When a firm looks the other way while a broker churns an account, both the broker and the firm can be held liable.
What this means for investors: If your account shows frequent trading that doesn’t match your stated goals, if fees are eating up your returns, or if your broker seems more focused on generating activity than protecting your capital, these are red flags that regulators are actively pursuing.
2. Account Type Recommendations
FINRA has significantly increased its focus on brokers recommending account types that generate higher fees — even when a simpler, less expensive account would serve the same purpose.
In a landmark case last year, FINRA found that a firm’s brokers recommended over 400 customers open new accounts that charged both commissions and an asset-under-management fee for financial planning services. The catch? Those same customers were already receiving those exact services through other accounts they held at the firm.
The result: the firm had to pay back nearly $600,000 in restitution to affected customers and was fined $100,000 on top of that.
What made this case notable wasn’t just the numbers — it was the complete absence of any guidance. The firm offered its brokers no criteria for evaluating whether these account recommendations were appropriate, and provided supervisors no procedures for reviewing the recommendations. This failure to supervise transformed individual broker misconduct into a firm-wide problem.
What this means for investors: If your broker recommended switching account types or opening new accounts, ask yourself: What benefit did you actually receive? Were you already getting these services elsewhere? Did the new account add fees without adding value? These are exactly the questions FINRA is now asking — and firms are being forced to answer.
3. Unsuitable Options Strategies
Within the past nine months, FINRA has brought three separate cases charging brokers with recommending options strategies that were not in their customers’ best interest — another violation of the Care Obligation.
Options are complex, high-risk instruments. When brokers recommend them to clients who lack the experience, risk tolerance, or financial situation to handle potential losses, Reg BI requires the broker to justify why that recommendation was appropriate. Increasingly, FINRA is finding that those justifications don’t hold up.
What this means for investors: If your broker recommended options, leveraged products, or other complex strategies without thoroughly explaining the risks — or if the strategy was clearly mismatched to your investment profile — this is an area of active regulatory scrutiny.
What Is Regulation Best Interest?
Regulation Best Interest, or Reg BI, took effect in 2020 and fundamentally changed the standard that broker-dealers must meet when making recommendations to retail customers.
Before Reg BI, brokers were held to a “suitability” standard — they only had to ensure a recommendation was “suitable” based on the customer’s financial situation. Reg BI raised the bar to a “best interest” standard, which requires brokers to consider:
- The customer’s investment profile (age, financial situation, goals, risk tolerance)
- The risks, rewards, and costs of the recommendation
- Whether there are alternatives that could better serve the customer
- Whether the recommendation puts the broker’s financial interests ahead of the customer’s
Reg BI applies to four specific obligations:
| Obligation | What It Requires |
|---|---|
| Disclosure Obligation | Brokers must clearly disclose material facts about the relationship, including conflicts of interest |
| Care Obligation | Recommendations must be in the customer’s best interest based on a reasonable understanding of their profile |
| Conflict of Interest Obligation | Brokers must identify and mitigate conflicts that could compromise their recommendations |
| Compliance Obligation | Firms must establish and enforce policies to ensure Reg BI compliance across the organization |
Why This Matters for Investors Who’ve Suffered Losses
The surge in Reg BI enforcement isn’t just regulatory noise — it’s a signal that the kinds of misconduct that harm everyday investors are now being met with formal charges, fines, and restitution orders.
For investors who’ve experienced:
- Excessive trading that generated commissions but not returns
- Account switches that added fees without adding value
- Complex product recommendations that were mismatched to their goals
- Broker recommendations that seemed to serve the broker’s interests more than their own
…the legal landscape has shifted in your favor. FINRA’s increasing willingness to bring cases means there’s more precedent, more regulatory clarity, and more momentum behind investor protection.
What to Do If You Suspect a Reg BI Violation
1. Gather your records. Collect account statements, trade confirmations, emails with your broker, and any documents showing your investment objectives and risk tolerance. The paper trail matters.
2. Document the timeline. When were you first approached about the recommendation? What was explained to you? What changed after the recommendation was implemented?
3. Identify the specific harm. Did fees increase? Did your account value decline disproportionately? Did you take on risk you didn’t understand or agree to?
4. Get a legal review. Reg BI cases are fact-specific. An experienced securities attorney can evaluate whether your situation aligns with the patterns FINRA is actively enforcing — and whether you have a viable claim for recovery.
The Bottom Line
FINRA’s 44 Reg BI cases in 2025 represent more than a statistical increase. They represent a regulator that’s identified where investors are getting hurt — churning, unsuitable account recommendations, and complex product sales — and is now systematically holding brokers and firms accountable.
For investors who’ve already suffered losses, this enforcement surge means two things: first, you’re not alone; and second, the legal and regulatory framework is increasingly on your side.
The best interest standard isn’t just a regulatory concept — it’s a legal obligation that brokers owe to every retail client. When they violate it, there are consequences. And increasingly, those consequences include making investors whole.
If you believe your broker violated Regulation Best Interest and you suffered financial losses as a result, contact our firm for a confidential case evaluation. We represent investors nationwide in securities fraud, broker misconduct, and investment loss recovery cases.
Sources: ThinkAdvisor, FINRA Annual Conference 2026 (May 13-15, Washington, D.C.), remarks by Tina Salehi Gubb, William Thompson, and Matt Minerva, FINRA Enforcement Division.
Investment Fraud Lawyers is a securities litigation firm representing investors nationwide in cases involving broker misconduct, unsuitable recommendations, excessive trading, and investment fraud. Contact us for a free case evaluation.
