The Financial Industry Regulatory Authority has detailed some of the key areas it will focus on as part of its updated enforcement program, according to Financial Advisor
At its annual conference recently, FINRA officials said the authority will step up its enforcement of cases involving Regulation Best Interest violations, excessive trading, and best execution failures.
The disclosure came as FINRA CEO Robert Cook said the regulator is conducting a review of its enforcement efforts that is expected to conclude by July 1. Cook said FINRA will release a public report detailing potential reforms and also plans to create a public enforcement manual similar to that of the Securities and Exchange Commision.
Cook previously explained that Bill St. Louis, executive vice president and head of enforcement at FINRA, was leading the efforts to improve the enforcement program. Two outside experts, Troy Paredes of Paredes Strategies, a former SEC commissioner; and Paul Eckert, a professor at William and Mary Law School, were also involved to “consider governance, policies, processes, and communications, as well as how FINRA enforcement works with other FINRA departments and federal and state regulators.”
St. Louis said the three main goals of the plan were driving more transparency, improving efficiency, and giving member firms more opportunities to be heard.
The project, part of the FINRA Forward initiative, includes “findings from enforcement consultants who are looking at our program and making recommendations to us,” Julie Glynn, senior vice president of Enforcement at FINRA.
In launching its review last year, Cook said, “Enforcement is an important focus for FINRA Forward, alongside examinations, market surveillance, and our other core regulatory functions for overseeing member firms and their associated persons.” He added that FINRA “must also be prepared, when necessary, to bring enforcement actions to address wrongdoing, deter future misconduct, and protect investors, member firms, and markets from significant harm.”
A study found that the top five enforcement issues by total fine for FINRA in 2025 were (1) Anti-Money Laundering; (2) Misleading, Inaccurate or Unbalanced Communications; (3) Trade Reporting; (4) Recordkeeping; and (5) Regulation Best Interest.
FINRA has increasingly emphasized a crackdown on Reg BI violations, bringing 40 formal actions in this area last year involving 50 firms and individuals. Another priority is in the category of best execution failures. St. Louis said failures in order routing and execution reviews can create widespread retail investor harm across “millions of customers” and “billions of shares.”
Other areas of concern including churning and unsuitable options strategies.
The authority was reported to be shifting its focus away from technical rule violations to emphasize cases involving fraud and market integrity.
“We do prioritize cases involving investor harm, especially with seniors or vulnerable investors,” Glynn said.
Financial Advisor also reported that FINRA is scrutinizing conflicts tied to routing customer orders to affiliated market makers or dark pools that generate transaction-based fees for firms. In some cases, firms allegedly failed to conduct adequate reviews of alternative venues that may have provided better execution quality for retail customer orders.
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