Interactive Brokers Fine with FINRA Over Regulatory Failures

Interactive Brokers LLC has agreed to pay a $400,000 fine as part of a settlement with the Financial Industry Regulatory Authority (FINRA) over multiple regulatory violations related to its reporting and compliance systems.

According to FINRA, between January 2020 and at least June 2022, Interactive Brokers failed to accurately report statistical and summary information regarding written customer complaints. The firm’s supervisory systems and written procedures during this period were deemed inadequate for ensuring compliance with FINRA Rule 4530(d), which requires firms to report specified customer complaint data. Consequently, the firm was in violation of FINRA Rules 4530, 3110, and 2010.

Interactive Brokers Fine with FINRA Over Regulatory Disclosure Failures

Additionally, from July 2011 through September 2022, Interactive Brokers failed to report 91 regulatory actions and civil complaints in a timely manner. Further investigation revealed that from March 2012 to February 2022, the firm also failed to amend its Uniform Application for Broker-Dealer Registration (Form BD) to disclose 12 foreign regulatory actions taken against its foreign affiliates. These failures resulted in violations of Article IV, Section 1(c) of FINRA’s By-Laws, as well as FINRA Rules 4530, 1122, and 2010.

As part of the settlement, Interactive Brokers neither admitted nor denied the findings but consented to the entry of FINRA’s findings. In addition to paying the $400,000 fine, the firm accepted censure and agreed to implement corrective measures to strengthen its compliance infrastructure and regulatory reporting processes.

The case underscores FINRA’s ongoing commitment to enforcing transparency and accountability in the brokerage industry, particularly around regulatory disclosures and customer complaint reporting. Regulators remind firms to maintain robust supervisory systems to ensure full and timely compliance with all regulatory requirements.

Company Overview

Interactive Brokers caters to diverse requirements, offering competitive fees alongside a wide array of trading options such as stocks, ETFs, options, futures, and other global assets. It distinguishes itself as a top-tier brokerage, particularly appealing to traders and investors seeking a straightforward trading experience. With Interactive Brokers’ user-friendly platform, users can execute trades seamlessly, benefiting from competitive spreads that enhance cost-effectiveness. 

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