Tastytrade Fined $850,000 by FINRA Over Best Execution Failures

FINRA has fined IG Group-owned broker tastytrade $850,000 for failing to maintain adequate best execution procedures for customer equity orders between January 2020 and January 2023.

According to FINRA, tastytrade routed customer orders to five market makers that paid for order flow (PFOF) but failed to regularly compare execution quality with other trading venues to ensure customers received the best available prices.

The regulator also found the firm's supervisory procedures were inadequate and did not meet the "regular and rigorous" review standards required by FINRA rules.

Without admitting or denying the findings, tastytrade agreed to pay the $850,000 fine and accept a censure to settle the case.

The enforcement reflects FINRA's continued scrutiny of brokers using payment for order flow while emphasizing that customer best execution must come first.