According to FINRA, Open to the Public Investing, Inc. was censured and fined $500,000 for failing to meet best execution obligations and disseminating misleading retail communications.

The firm failed to conduct reasonable reviews of the execution quality of customer orders. Its execution quality reviews were limited to examining its clearing firm's quarterly Rule 606 reports, which did not provide any data specific to the firm's execution quality or the quality of executions available from competing markets. This minimal review process was inadequate to fulfill the firm's best execution obligations to customers.

The supervisory system was fundamentally flawed. The firm's supervisory reviews were not reasonably designed to evaluate whether best execution obligations were being met, and written supervisory procedures provided no guidance for conducting execution quality reviews. Most remarkably, the procedures were not tailored to the firm's business—they addressed best execution for fixed-income securities, which the firm did not offer, while failing to address equity trading, which was the firm's only business.

The firm also failed to disclose at account opening or annually thereafter that it received payment for order flow through its routing arrangements—a material conflict of interest that customers have a right to know. Additionally, the firm disseminated retail communications containing misleading statements.

This case is particularly concerning because it involves a firm that markets itself as investor-friendly but failed to meet basic obligations to ensure customers received quality executions. Best execution is a fundamental obligation that directly impacts customer investment returns. Investors should be aware that not all brokerage firms adequately review execution quality, and payment for order flow arrangements can create conflicts of interest. The failure to properly disclose these arrangements prevented customers from making informed decisions about where to place their trades.