FINRA Suspends 39-Year Veteran Over $100,000 in Unnecessary Fees

Regulators do not suspend four-decade veterans lightly. When they do, it commonly signals a failure to adapt to modern investor safeguard standards. A recent enforcement action by the Financial Industry Regulatory Authority (FINRA) highlights a costly trend: long-tenured advisors using outdated commission structures that violate Regulation Best Interest (Reg BI).

The Enforcement Action

According to regulatory reports, FINRA suspended an industry veteran with 39 years of experience after determining the advisor unnecessarily charged customers over $100,000 in excessive commissions.

The core of the violation involved “account gaming.” The advisor allegedly recommended that clients execute trades in commission-based brokerage accounts even though those same clients held fee-based advisory accounts where the trades would have been commission-free. By layering commissions on top of existing advisory fees, the advisor prioritized the firm’s and the advisor’s compensation over the client’s bottom line.

Why This Case Changes the Narrative

This action dismantles the “experience equals safety” myth and highlights three critical shifts in the regulatory landscape:

• Cost is Now a Compliance Requirement: Under Reg BI’s “Care Obligation,” a recommendation isn’t just about the investment—it’s about the cost. If a cheaper way to execute the same trade exists (like using an advisory account instead of a brokerage account), choosing the more expensive route is now a punishable violation.
• The End of “Old School” Habits: Many veterans grew up in a commission-heavy industry. This suspension proves that FINRA will no longer tolerate “legacy” billing practices that conflict with modern best-interest standards.
• A Rise in Enforcement: This case is part of a 2025-2026 trend in which Reg BI enforcement actions have surpassed previous years, signaling that regulators are now actively “policing the books” rather than issuing only warnings.

Red Flags for Investors

Investors should review their monthly statements for these specific warning signs of “double-dipping” or excessive costs:

• Dual-Billing: Paying an annual percentage fee (AUM fee) while also seeing individual “transaction charges” or commissions on your statement.
• Product Switching: Frequent selling of one mutual fund or ETF to buy another, which can trigger unnecessary sales loads or tax hits.
• Inconsistent Account Use: Having both a “brokerage” and an “advisory” account but seeing the majority of activity—and costs—concentrated in the brokerage side.

Options for Recovery

When a regulator finds that an advisor has overcharged clients, it often opens the door for individual investors to seek restitution. Potential claims typically include:

• Breach of Best Interest Obligations
• Unsuitable Account Labeling
• Failure to Supervise (against the firm)

Regulatory findings can function as powerful evidence in FINRA arbitration, a common venue for recovering losses tied to excessive fees or inappropriate recommendations.

The Bottom Line

Longevity in the financial industry is a sign of survival, not necessarily a clean record. As regulators sharpen their focus on Reg BI, investors must remain vigilant. High costs don’t just “feel” wrong—under today’s laws, they may be a direct violation of your advisor’s legal duties.