When you place a stock trade through your brokerage firm, that firm owes you a fundamental duty known as “best execution”—meaning they must seek the most favorable terms and prices reasonably available in the market. FINRA recently censured and fined Chicago-based options broker Tastytrade $850,000 for failing to uphold this critical obligation for its retail customers.

The Allegations According to the July 2026 settlement, FINRA found that between January 2020 and January 2023, Tastytrade routed all of its customers’ equity orders to just five market makers, all of whom paid the firm for the order flow Finance Magnates.

While payment for order flow is legal, FINRA rules dictate that firms must still rigorously compare execution quality across competing market centers. Tastytrade’s best-execution committee allegedly failed to look beyond their own five paying market makers, ignoring data that could have secured better pricing for their customers. The regulator noted that the firm failed to track “price disimprovement”—cases where a customer receives a worse price than the best quote available.

What This Means for Investors Retail investors rely entirely on their brokerage platforms to execute trades fairly. When a firm prioritizes its own kickbacks (payment for order flow) over securing the best possible price for the client, the client suffers invisible but significant losses over time. If you suspect your trading platform has systematically failed to secure fair execution for your portfolio, a FINRA arbitration attorney can help you hold the firm accountable.