FINRA Fines Alexander Investment Services for Alleged Regulation Best Interest Violations
The Financial Industry Regulatory Authority (FINRA) has reportedly fined Alexander Investment Services Co. $25,000 for alleged violations of Regulation Best Interest (Reg BI), according to a recent settlement.
FINRA Findings
Since June 30, 2020, Alexander Investment Services has been recommending securities to retail customers. However, according to FINRA, the firm failed to establish and maintain written policies and procedures reasonably designed to comply with the requirements of Reg BI, which was implemented under the Securities Exchange Act of 1934.
Although the firm’s written procedures referenced an obligation to act in a customer’s best interest, FINRA found that they lacked specific provisions addressing the rule’s core obligations — including the Conflict of Interest and Compliance components required by Reg BI.
In March 2024, Alexander Investment Services updated its policies and procedures, but FINRA determined that the updates still did not sufficiently address Reg BI’s specific requirements. The updated documents discussed Reg BI only in general terms and failed to identify the principal responsible for compliance oversight or define how supervisory reviews should be conducted and documented.
As a result, FINRA found that the firm violated Exchange Act Rule 15l-1(a)(1), as well as FINRA Rules 3110 (Supervision) and 2010 (Standards of Commercial Honor and Principles of Trade).
Sanctions Imposed
Without admitting or denying the findings, Alexander Investment Services consented to the following sanctions:
- Censure
- $25,000 fine
- Certification requirement: A senior management member who is a registered principal must certify in writing that the firm has remediated the deficiencies and implemented written supervisory procedures reasonably designed to achieve compliance with Reg BI.
Understanding Regulation Best Interest (Reg BI)
Reg BI was adopted by the U.S. Securities and Exchange Commission (SEC) to ensure that broker-dealers act in the best interests of retail investors when making investment recommendations. Firms are required to establish, maintain, and enforce written policies that address conflicts of interest and ensure that recommendations are made with the customer’s financial interests in mind.
Failure to comply with Reg BI can expose firms to regulatory fines, supervisory sanctions, and potential investor claims.
FAQs about Alexander Investment Services and Reg BI Violations
What is Regulation Best Interest (Reg BI)?
Reg BI is a federal standard of conduct requiring broker-dealers to act in the best interest of retail customers when making investment recommendations. It is designed to prevent conflicts of interest and ensure that financial advice prioritizes the client’s financial well-being.
Why did FINRA fine Alexander Investment Services?
FINRA found that Alexander Investment Services failed to establish and maintain written supervisory procedures that complied with Reg BI. Specifically, the firm’s policies did not adequately address conflicts of interest, compliance obligations, or designate a principal responsible for oversight.
What should I do if I believe my advisor acted improperly?
If you suspect your financial advisor or brokerage firm failed to act in your best interest, you should contact a securities attorney to review your potential claim. The White Law Group offers free consultations to evaluate investor claims involving Reg BI violations, negligence, or failure to supervise.
The White Law Group – Securities Attorneys for Investors
The securities attorneys at The White Law Group have represented hundreds of investors in FINRA arbitration claims against brokerage firms for unsuitable investment recommendations, Reg BI violations, and failure to supervise.
If you have suffered investment losses, call The White Law Group at (888) 637-5510 for a free consultation.
For more information, visit www.whitesecuritieslaw.com.
Last modified: October 24, 2025
